The Social Multiplier and Labour Market Participation of Mothers

47 Pages Posted: 11 Jan 2007

See all articles by Eric Maurin

Eric Maurin

Paris School of Economics (PSE); IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Julie Moschion

the University of Queensland; Institute for the Study of Labor (IZA)

Date Written: December 2006

Abstract

A mother's decision to participate in the labour market is correlated with those of the other mothers living in the same neighbourhood. This paper studies the extent to which this is causal. An identification problem exists because mothers with similar characteristics are often observed living in close proximity. Our identifying strategy uses instrumental variables. Specifically, the sex of the eldest siblings of the other mothers living in the neighbourhood is used as an instrument to identify the effect of neighbours' participation in the labour market on own participation. The IV estimate suggests a strong elasticity of own participation to neighbours participation. Interestingly enough, estimates using the quarters of birth of the children of the other mothers living in the neighbourhood as instruments are as large as estimates using the sex-mix instruments. We provide additional evidence showing that the random fertility shocks that affect the timing of births and the participation in the labour market of a mother, affect the participation in the labour market of the other mothers in the neighbourhood too.

Keywords: female participation in the labour market, neighbourhood effects, social multiplier

JEL Classification: J22

Suggested Citation

Maurin, Eric and Moschion, Julie, The Social Multiplier and Labour Market Participation of Mothers (December 2006). IZA Discussion Paper No. 2513, Available at SSRN: https://ssrn.com/abstract=955858 or http://dx.doi.org/10.2139/ssrn.955858

Eric Maurin (Contact Author)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Julie Moschion

the University of Queensland ( email )

St Lucia
Brisbane, Queensland 4072
Australia

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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