THE CAUSAL EFFECT OF FAMILY SIZE ON MOTHERS' LABOR SUPPLY: EVIDENCE FROM FRANCE AND ITS OVERSEAS REGIONS

We investigate the causal impact of family size on mothers' labor supply for France and its overseas regions. Using an instrumental variable (1V) model of participation, exploiting two exogenous increases of fertility through twin births and gender mix composition, we find that the magnitude of the negative causal impact is varying. In particular, for a Reunionese mother, having more than two children (resp. three) reduces labor market participation of about 12.5 (resp. 13.9) percentage points. The same effect is significantly lower in mainland France since it decreases female activity by around 8.9 (resp. 7.4) points. The other three French overseas regions differ from Reunion because the causal impact is not statistically different from mainland France. We also show that the magnitude of the negative impact is varying with 1) the age of the youngest child, 2) mothers' education level and 3) across mainland France regions. The supply of childcare at the regional level seems to explain, at least in part, this geographical difference.