DP19886 Women at Work: Fertility, Occupational Choice and Income
We investigate how changes in barriers to female labor force participation and the child penalty impact occupational decisions, human capital, fertility, and income. To this end, we develop a general equilibrium model with men and women, endogenous fertility, human capital investment, and occupational choice. By calibrating the model to US data, we estimate that changes in both gender distortions account for 30% of the US growth observed between 1960 and 2020. While the decline in the child penalty increases fertility, the reallocation of female labor from high-fertility to low-fertility occupations explains approximately 28% of the decline in the fertility rate during this period. Furthermore, reducing existing gender barriers would increase output per capita by 9% in 2020, enhance gender diversity across occupations, increase fertility, and ultimately improve female welfare.
