Time series analysis of fertility and female labor market behavior

Cointegration methods are employed to investigate relations among total fertility, female wages, labor force participation, educational attainment, and male relative cohort size. Two long run relations among the series are found, and these are identified as a fertility and a labor supply equation. All covariates enter into these relations with significant coefficients and theoretically plausible signs. Innovation analysis shows that both fertility and female labor force participation respond to changes in relative cohort size in directions consistent with the Easterlin hypothesis. Female labor force participation responds significantly to fertility shocks, but reverse effects are insignificant.