Author: Dung Kieu Nguyen
Year: 2019, Volume 19 Number 2
This paper investigates the impact of the abortion law changes on family labor supply in the United States in the early 1970s. It attempts to answer the key question: do the law changes affect labor supply of fertile women and their parents who co-reside with them? Following the works of Chiappori, Fortin, and Lacroix (2002) and Oreffice (2007), I propose a collective labor supply model for households in which a fertile daughter resides with her parents. In empirical section, using data from the March Current Population Survey and Panel Study of Income Dynamics, I find a significantly positive influence of the law on fertile women’s capacity to work and a negative influence on their mothers in mother-daughter family scenario. It can be explained that the availability of the birth control allows the daughters more time to work for earning and provides their mothers fewer opportunities to financially support their newborn grandchildren. The paper uses the Heckman selection bias correction technique to correct the bias due to missing data on working behaviors of the family members. The novelty of this paper includes the investigation of the effect on working behaviors of people rather than spouses in an extended family.
Keywords: Abortion reform, labor supply, fertility, bargaining, children, fertile women