The effect of fertility timing on labor market work duration

We provide a framework for the estimation of the impact of fertility timing on female long-term labor supply, measured as labor market work duration. We show that the genuine treatment is waiting time to birth rather than birth per se. In the application we control for the joint decision of fertility and labor supply by using the ‘same-sex’ instrument in a control function setting. We find that having a third child will in general reduce the labor market work duration. The magnitude of the effect depends to a large extent on the mothers’ age at second birth but also on the waiting time to the third child and the education level.