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Responses of Female Labor Supply and Fertility to the Demographic Cycle

Evangelos M. Falaris and H Elizabeth Peters

Abstract

Much of the variation in female life-cycle labor supply across different cohorts of U.S. women born during the twentieth century has been due to changes in the age at which a woman has her first birth and in the length of time spent not working following childbearing. Two contrasting schools have emerged to explain the relationship between the changes in fertility and female labor force participation over time: the "Chicago" school (e.g. Butz and Ward, 1979) focuses primarily on changes in the value of a woman's time (i.e. female wage rates) and the Easterlin school (Easterlin, 1968) focuses on changes in relative income due to the demographic cycle (i.e. the baby boom and baby bust). In this paper we utilize ideas from both schools, and we address empirically the issue of how important the demographic cycle is in explaining the variation in women's ages at first birth and in the duration of time not working following the first birth.