The impact of multiple births on women's and men's employment outcomes.
Each additional child increases the quantity of childcare activities, raising the marginal value of time at home. Thus, having children may induce some women to reduce their hours of work, find less demanding occupations or leave the labor force entirely. Mother's wages can also be affected if less demanding jobs are also low paid jobs, or if employers discriminate against mothers of larger families. Potential coordination within the family suggests that fathers may also adjust their labor supply as household's size increases. I use survey data from Chile to estimate the effect of fertility on parent's labor supply and wages. Exogenous variability in family size is used to correct for the unobserved heterogeneity and the endogeneity biases that arise in this context. The instruments considered are multiple births and the sex composition of previous children. One limitation of this identification strategy is that it cannot be used to study the impact of the first child on parent's employment, even though its impact may be the largest. Additional children affect labor supply and wages of both parents'. While simple probit and linear probability models confirm that fertility has a significant negative impact on women's labor force participation, once IV controls are included in the model specification the adverse impact of an extra child on women's labor force participation remains only for adding the second child. In a model that considers women's selection into part-time work, full-time work or non-employment I observe a motherhood wage premium for those that have a second child. I cannot reject the hypothesis that there is no additional premium from having more than two children. The magnitude of men's premium is only half of women's. In terms of hours of work, only having three children or more adversely affects the father's labor supply. These results suggest some sort of coordination within the household, with women making the first and larger adjustments to changes in family size, and husbands only sharing these adjustments significantly as family size increases further.