Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/183479
Authors: 
Frimmel, Wolfgang
Halla, Martin
Schmidpeter, Bernhard
Winter-Ebmer, Rudolf
Year of Publication: 
2017
Series/Report no.: 
IHS Economics Series 336
Abstract: 
The labor supply effects of becoming a grandmother are not well established in the empirical literature. We estimate the effect of becoming a grandmother on the labor supply decision of older workers. Under the assumption that grandmothers cannot predict the exact date of conception of their grandchild, we identify the effect of the first grandchild on employment (extensive margin). Our Timing-of-Events approach shows that having a first grandchild increases the probability of leaving prematurely the labor market. This effect is stronger when informal childcare is more valuable to the mother. To estimate the effect of an additional grandchild (intensive margin), we assume that the incidence of a twin birth among the third generation is not correlated with unobserved determinants of the grandmother's labor supply (first generation). Our respective instrumental variable estimations show a significant effect of further grandchildren. Our results highlight the important influence of the extended family on the decisions of older workers and point to mediating effects of different institutional settings.
Subjects: 
Grandchildren
female labor supply
timing of events
instrumental variables
JEL: 
J13
J14
J22
Document Type: 
Working Paper
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