reversing the reversal? the cross-country correlation between female labour market participation and...
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Reversing the reversal?The cross-country correlation between female labour market participation and
fertility revisited
Anna Matysiak and Tomáš Sobotka
“Family dynamics, fertility choices, and family policy”
Oslo 9-10.10.2014
Background • Many publications since around 2000 (esp. 2000-2005): the initially
negative cross-country correlation between female labour force participation (FLFP) and period total fertility rates (TFR) reversed from negative to positive in (Western) Europe and OECD countries around mid-1980s
Source: Rindfuss et al. (2003)Source: Engelhardt and Prskawetz (2004)
Background
The reversal received many interpretations:
• Cross-country differences in policies, work-family incompatibility
(Rindfuss et al. 2004)
• Labour market rigidities in Southern Europe (Ahn and Mira
2002, Adsera 2005)
• Time series correlations remain negative or turn insignificant
(Engelhardt et al. 2004, Kögel 2004)
• Split correlation (Lesthaeghe and Permanyer 2014)
Revisiting the correlationThe positive TFR – FLFP correlation has become one of the key stylised facts about fertility in the developed world
• How solid is this link?
Our contribution:
• Looking at the recent data through 2012 (most previous research extends until around 2000)
• Refining the measurement of the LFP: excluding early reproductive (time in education) and post-reproductive ages
• Addressing the split correlation
• Looking at smaller regions (NUTS2)
• Adding a cohort dimension; addressing possible tempo effect in period TFR
• Extending the analysis to CEE countries (wherever possible)
DataFocus:
• Period: 1975-2012
• Cohorts: 1950-1975
• 37 countries: EU-15, Norway and Switzerland, 5 outside Europe (Australia, Canada, Japan, New Zealand, US), 14 Central & Eastern Europe (some analyses only)
FLFP by age (focus: 25-39 and 25-44):
• from LFS and population censuses, mostly from OECD Employment Database, ILO Laborsta Database + national statistical offices
• cohort measures (age 25-39) reconstructed from period FLFP
Period and cohort TFRs:
• computations based on Eurostat data, national statistical offices, Human Fertility Database; small part of cohort TFR projected for cohorts 1970-75
Changing the age groups of LFP measures
The cross-country correlation between FLFP and TFR, 1975-2012
Data for “Western” OECD countries, different age specifications of FLFP
-0.80
-0.60
-0.40
-0.20
0.00
0.20
0.40
0.60
0.80
1975 1980 1985 1990 1995 2000 2005 2010
TFR
x F
LFP
corr
elati
on
Year
25-39 all 25-44 all
15-64 all
Why has the correlation disappeared?
Why has the correlation disappeared?
Labour force participation rates (%), women aged 25-39 Period total fertility rate
The high LFP countries (LFPR in 1980 >70%): Denmark, Finland, SwedenThe medium-high LFP countries (LFPR in 1980 60-70%): Portugal, Belgium, Canada, France, United States, NorwayThe medium-low LFP countries (LFPR in 1980 50-60%): Japan, Australia, Austria, United Kingdom, West GermanyThe low LFP countries (LFPR in 1980 <50%): Ireland, Spain, Greece, Netherlands, New Zealand, Italy, Luxembourg
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
LOW MEDIUM-LOW MEDIUM-HIGH HIGH
1.40
1.60
1.80
2.00
2.20
2.40
2.60
2.80
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
LOW MEDIUM-LOW MEDIUM-HIGH HIGH
Why has the correlation disappeared?
Until mid-1990s:Trends in correlation driven by changes in the TFR
From around 2000:Trends in correlation driven by changes (convergence) in FLFP levels
19751978
19811984
19871990
19931996
19992002
20052008
2011
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
observed LFP frozen at 1995
year
cros
s-co
untr
y co
rrel
ation
bet
wee
n pe
riod
TFR
and
FLFP
(age
s 25-
39)
Simple simulation: what would happen if we “froze” the TFR and /or FLFP at their 1995 levels?
Changing the country coverage
and the analytical units
20101998
Split - correlation
What if we include CEE countries?
No correlation would be observed in the 1990s and 2000s if the CEE countries were taken into account.
What if we go down to subnational level?
The correlation at the regional (NUTS-2) level in EU-15, Norway and Switzerland has been negative (in both country groups) but has been weakening in recent years. The developments in CEE were different.
Note: Non-European countries are excluded from this analysisThe cross-region correlation is based on within country variation in TFR and FLFPR
Using cohort measures
Why study cohort correlation? • Life-cycle indicators of fertility & labour involvement• Unaffected by short-term ups and downs that can influence period
data• Solving the “tempo effect” problem in the period TFR: cohort fertility
gives the real measure of fertility “quantum” unaffected by the changes in timing of childbearing
The cohort “story”: much weaker correlation, but similar trends
The cross-country correlation between cohort TFR and cohort FLFP as compared with the period correlation, 23 OECD countries
-1.00
-0.80
-0.60
-0.40
-0.20
0.00
0.20
0.40
0.60
0.80
1.00
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
TFR
x FL
FP c
orre
latio
n
Birth cohort
Cohort correlation
Period correlation (lagged by 30 years: year = cohort + 30)
The cohort correlation peaks in the 1970 cohort at a low level of 0.28
Discussion
Conclusions
• The period cross-country correlation for „Western” OECD countries
disappears after 2010 when FLFP analysed for the key reproductive &
post-education ages only (25-39)
• This trend driven by a strong cross-country convergence towards a
similar high FLFP levels around 80%
• The finding of the strong positive period cross-country correlation for
„Western” OECD countries in the 1990s was partly driven by:
– Measures used (period indicators, broad age groups in LFP measures)
– Analytical units used (negative although weakening correlation at the regional
level)
– Countries covered (no correlation after adding CEE countries, split correlation)
• Weakening cross-regional within-country correlation is appealing and
requires further investigations
DiscussionFuture: The correlation may come and go as the relationship becomes volatile due to similar levels of LFP small changes in LFP or TFR may trigger shifts in correlations
Adsera (2004) had the most accurate foresightIt is likely, however, that the positive correlation between fertility and female labor participation may fade away (…)
As women in countries with the lowest participation rates gradually enter the labor force, female participation rates will slowly converge across developed countries. However, if their fertility does not increase (due to lack of changes in labor market institutions),the relation between fertility and participation in the cross-section of OECD countries should become flat in the near future.
Adserà, A. 2004. “Changing fertility rates in developed countries. The impact of labour market institutions.” Journal of Population Economics 17(1): 1-27.
Research presented here was funded by the European Research Council under the European Union’s Seventh Framework Programme (FP7/2007-2013) / ERC Grant agreement n° 284238 (EURREP).
EURREP website: www.eurrep.org