Labor Market Institutions and Fertility

Abstract

Some high‐income countries have total fertility rates as low as one child. Using Spanish administrative data, we document that temporary contracts correlate with lower first birth rates. Also, women with children are less likely to work split‐shift jobs with long breaks in the middle of the day. We build a life‐cycle model where women decide on labor supply and fertility. We show that reforms eliminating duality or split‐shift jobs raise women's labor participation, narrow the employment gap between mothers and nonmothers, and boost fertility for working women. These reforms, together with childcare subsidies, increase married women's fertility to 1.8 children.