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On the Relationship between Female Labor-Force Participation and Total Fertility Rate among OECD Countries: Two Roles of Work-Family Balance

Yamaguchi, Kazuo
Wed, 2007-08-01

Although it is well documented that the correlation between Female Labor Participation Rate (FLPR) and Total Fertility Rate (TFR) in OECD countries changed from negative (where countries with higher FLPR had lower TFR) to positive during the 1980s, it has been unknown whether this implies a change in the causal relationship between the two variables. In this article, I will demonstrate that the average effect of FLPR on TFR is still negative when controlling for unobserved heterogeneity in TFR levels, but this effect has been weakened through two mechanisms that involve the role of work-family balance: (1) an interaction effect of FLPR and work-family balance on TFR, and (2) a positive indirect effect of FLPR on TFR through the attainment of work-family balance.

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