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.