DP384 | Cohort Size and Female Labor Supply

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01/03/1990

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Abstract

Easterlin's relative income hypothesis projects for smaller cohorts increasing wages, increasing fertility and decreasing female labor supply. This paper reviews the literature on the substitutability of female for male labor, on relative income changes as a result of changes in cohort size and on husband's income as a determinant of female labor supply. It is concluded that own wage is a more important determinant of female labor supply than husband's income. Policies that increase female net wages therefore stimulate female labor supply. The example of Sweden shows that pronatalist policies can be combined with policies that stimulate female labor supply.