Working Paper

Fertility and Family Labor Supply

Abstract: We study how fertility decisions interact with labor supply and human capital accumulation of men and women. First, we use longitudinal Danish register data and tax reforms to show that increases in wages of women decrease fertility while increases in wages of men increase fertility. Second, we estimate a life-cycle model to quantify the importance of fertility adjustments for labor supply and long-run gender inequality. Wage elasticities of women are more than 10% lower if fertility cannot be adjusted. Finally, we show that the long-term consequences of human capital depreciation around childbirth are an important driver of the long-run gender wage gap in the model.

JEL Classification: D15; H24; J13; J22;

https://doi.org/10.21033/wp-2025-26

Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Working Paper Series

Publication Date: 2025-12-19

Number: WP 2025-26