Motherhood and market work decisions in institutional context: A European perspective

In this paper, we explore the impact of social policies and labour market characteristics on women's decisions regarding work and childbearing, using data from the European Community Household Panel (ECHP). We estimate the two decisions jointly and, in addition to personal characteristics, we include variables related to the childcare system, parental leave arrangements, family allowances, and part time opportunities. Our empirical results indicate that a non-negligible portion of the differences in labour market participation decisions of women from different European countries can be attributed to characteristics of their social policies, while the impact of environmental variables on fertility decisions is only marginally significant. Environmental effects vary by educational level in a significant way. Part-time opportunities (when well-paid and protected), childcare, optional parental leave, and child allowances have more of an impact on the participation decisions of women at lower educational levels.