Female labor market transitions and the timing of births: a simultaneous analysis of the effects of schooling

This paper develops a simultaneous analysis of the timing of births and labor market transitions of women in the Netherlands. The results show that an increase in the years of schooling of a woman causes her to schedule births later in life but it does not significantly affect her completed fertility. Moreover, the effects of an increase in schooling on the timing of births mainly have an impact through changes in female employment status: a more highly educated woman is more likely to move into employment and, consequently, to delay births. We show that ignoring the endogeneity of fertility results in an underestimation of the effects of schooling on lifecycle female employment. Unobserved heterogeneity, interpreted as preferences over work and children, turns out to be of major empirical importance. Women with a higher preference of work over children have significantly higher employment rates at all ages, delay births and have a significant lower level of completed fertility. (C) 2001 Elsevier Science B,V. All rights reserved.