The correlation between fertility and female employment: an analysis at the regional level for Austria and Italy

Marija Mamolo, Vienna Institute of Demography
Alexia Fürnkranz-Prskawetz, Vienna University of Technology

The cross-country correlation between total fertility (TFR) and female labour force participation (FLP) across OECD countries has changed its sign from a negative value before the 1980s to a positive value thereafter. However, Kögel (2004) and Engelhardt and Prskawetz (2005) show that (a) unmeasured country-specific factors and (b) country-heterogeneity in the magnitude of the negative time-series association account for this reversal. Variables that may account for the country heterogeneity (labour market, educational, institutional, policy settings, etc.) may also vary across regions within countries. We conduct such a regional level analysis for Austria and Italy and investigate whether a change in the correlation between FLP and TFR has occurred within a country across regions. In Austria there has been a reversal in the correlation, while for Italy the positive correlation applies only for the recent years. Panel regression results suggest though that the relation remains negative, but with significant regional heterogeneity.