Compatibility of Children and Work Preferences: Two European Cases

Anna Giraldo, Università di Padova
Stefano Mazzuco, Università di Padova
Francesca Michielin, Università Bocconi

Nowadays female participation in the labor market and motherhood are competing and the conciliation between them can be solved in different ways. In this paper we analyze children and work preferences in two European countries with very different behavior: Italy and France. Italy shares with Spain the lowest fertility level (the TFR is around 1.25) whereas French TFR reaches the highest level (1.89) among the European Community countries. Moreover female employment rate in Italy is about 40% whereas in France reaches 70%. In these two contexts, using data from the European Community Household Panel, we consider fertility as a function of both household income and female participation in the labor market, taking into account unobserved heterogeneity in children and work preferences and the social benefits from the welfare system. We even consider the opportunity costs of having children, through a measure of the earning potentials, obtained as predicted wages.