Female labor force participation and fertility in Latin America: decomposing two decades of change

Female labor force participation (LFP) and fertility have evolved jointly across Latin America, with participation rising and fertility declining over the last two decades. This paper studies how the increase in women’s labor supply in the five largest economies in the region, as well as in the US, is partitioned between changes in population composition and changes in participation within groups. We define three groups of women based solely on whether the youngest child in the household is under age 6, between ages 6 and 12, or whether there are no children under age 13. We find that, in all countries, changes in women’s labor force participation rate within child groups account for the overwhelming share of the increase in LFP, while compositional shifts across child groups account for relatively little. When we further disaggregate the sample by education as well as by the age of their children, changes in population composition become more important. In this richer decomposition, more educated women without children under age 13 are the largest contributors to the increase in LFP, as both their participation rates and population share increased over the period.