CHILDREN AND THEIR PARENTS LABOR SUPPLY - EVIDENCE FROM EXOGENOUS VARIATION IN FAMILY-SIZE

Research on the labor-supply consequences of childbearing is complicat ed by the endogeneity of fertility. This study uses parental preferenc es for a mixed sibling-sex composition to construct instrumental varia bles (IV) estimates of the effect of childbearing on labor supply. IV estimates for women are significant but smaller than ordinary least-sq uares estimates. The IV are also smaller for more educated women and s how no impact of family size on husbands' labor supply. A comparison o f estimates using sibling-sex composition and twins instruments implie s that the impact of a third child disappears when the child reaches a ge 13.