Scandinavian Working Papers in Economics

Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2018:2: Can Women Have Children and a Career? IV Evidence from IVF Treatments

Petter Lundborg (), Erik Plug () and Astrid Würtz Rasmussen ()
Additional contact information
Petter Lundborg: Department of Economics, Lund University, Postal: Lunds universitet, Box 117, 221 00 LUND
Erik Plug: Amsterdam School of Economics, University of Amsterdam, Postal: Department of Economics University of Amsterdam Roetersstraat 111018 WB Amsterdam The Netherlands
Astrid Würtz Rasmussen: Department of Economics and Business Economics, Aarhus, Postal: Fuglesangs Allé 4, , building 2621, 10 , 8210 Aarhus V, Denmark

Abstract: This paper introduces a new IV strategy based on IVF (in vitro fertilization) induced fertility variation among childless women to estimate the causal effect of having children on their career. For this purpose, we use administrative data on IVF treated women in Denmark. Because observed chances of IVF success do not depend on labor market histories, IVF treatment success provides a plausible instrument for childbearing. Our IV estimates indicate that fertility effects on earnings are: (i) negative, large and long lasting; (ii) driven by fertility effects on hourly earnings and not so much on labor supply; and (iii) much stronger at the extensive margin than at the intensive margin.

Keywords: Children; extensive and intensive fertility margins; female labor supply

JEL-codes: D82; J13; J16; J22; J31; J32

52 pages, March 28, 2018

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