Societal Change and the Economics of Fertility and Female Labour Force Participation

Abstract

This paper reports the results of a New Zealand study of one aspect of household economics: the relationship between fertility behaviour and labour supply. Empirical research has shown that the presence of young children affects labour supply of the mother. New Zealand examples are Hyman (1979) and Harris and Raney (1991). However, Hockey and Khawaja (1984) found that a woman's labour force participation negatively affects fertility. In this paper we argue that fertility and labour force participation decisions are determined jointly rather than that there is a one-way causal relationship. We test this hypothesis by means of a simple regression model of fertility and female labour force participation using grouped data from 22 Local Government Regions (LGRs), pooled for the years 1976, 1981 and 1986. The next section discusses some of the theoretical issues. This is followed by a description of the data and a discussion of regression equations. After summing up the results, the last section provides some suggestions for further research.