DP13317 Globalization, Gender, and the Family

Author(s): Wolfgang Keller, Hale Utar
Publication Date: November 2018
Keyword(s): Divorce, Earnings Inequality, Fertility, Gender Gap, import competition, Marriage
JEL(s): F16, F66, J12, J13, J16
Programme Areas: Labour Economics, International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13317

This paper shows that globalization has far-reaching implications for the economy's fertility rate and family structure because they influence work-life balance. Employing population register data on new births, marriages, and divorces together with employer-employee linked data for Denmark, we show that lower labor market opportunities due to Chinese import competition lead to a shift towards family, with more parental leave taking and higher fertility as well as more marriages and fewer divorces. This pro-family, pro-child shift is driven largely by women, not men. Correspondingly, the negative earnings implications of the rising import competition are concentrated on women, and gender earnings inequality increases. We show that the choice of market versus family is a major determinant of worker adjustment costs to labor market shocks. While older workers respond to the shock rather similarly whether female or not, for young workers the fertility response takes away the adjustment advantage they typically have-if the worker is a woman. We find that the female biological clock-women have difficulties to conceive beyond their early forties-is central for the gender differential, rather than the composition of jobs and workplaces, as well as other potential causes.