Ho-Po  Crystal Wong

This paper presents instrumental variables (IV) estimates of the effect of childbearing on female labor supply in Hong Kong. Using the preference for sons in Chinese families, I extend the work of Angrist and Evans (1998) to estimate the effect of a second child on labor supply, as well as third and subsequent children (henceforth AE). In contrast to AE, the magnitude of the IV estimates of the effect of additional fertility on mothers’ labor supply are substantially higher than the OLS estimates. Also, among highly educated women in Hong Kong, child gender is a much weaker instrument for fertility and the 2SLS estimates are much more noisy. These findings reflect that educated women are less influenced by traditional values. The overall results suggest that the labor supply of traditional women with son preference responds strongly to increased fertility.