The Effect of a First Child on Female Labor Supply: Evidence from Women in Fertility Treatments

Julian P. Cristia, Congressional Budget Office (CBO)

Estimating the causal effect of fertility on female labor supply is complicated due to the endogeneity of the fertility decision. Ideally, this problem could be solved by running a social experiment where women are randomly assigned children. In this paper, I use field data from the National Survey of Family Growth (NSFG) to mimic this hypothetical experiment by focusing on a sample of women that sought help to become pregnant. After a certain period since they started receiving help, only some of these women are successful. In this instance, fertility appears to be exogenous to labor supply in that pre-treatment labor supply is uncorrelated with subsequent fertility. Using this empirical strategy, I estimate that having a first child younger than one year old reduces female employment by 26.3 percentage points. These estimates are close to OLS estimates obtained using Census data and to OLS and fixed-effects estimates from NSFG data.