Sibling-sex composition, childbearing and female labour market outcomes in Indonesia

This paper examines the effect of fertility on women�s labor market outcomes in Indonesia using data from the Indonesian Demographic and Health Survey. Parental preferences for a mixed sibling-sex composition are used to construct an instrumental variable to identify the causal effect of fertility on a range of outcome variables, including labor force participation, full time employment, employment in the formal sector and occupational choices. Our findings confirm that Indonesian parents have a preference for gender mix in their offspring, suggesting that families with the first two children of the same sex are more likely to have a third child. The IV estimates show that having a third child because of the first two children being same sex reduces women�s labor force participation, formal employment and employment in agriculture, manufacturing, management and administration jobs. The effects are stronger for women aged 21�35�years, but largely insignificant for women aged 36�49�years.