Abstract
As many European countries have to cope with a shrinking and aging labor force, one important goal of redistributing work is to increase female labor force participation. In some countries, however, this increase could come at the cost of a reduced fertility rate as childcare facilities might be rare or institutional settings and social support are not sufficiently family friendly. In this paper we investigate how and especially at which ages female labor force participation could be increased in a country such as Austria, with an apparently strong negative correlation between childbearing and labor force participation, without reducing fertility even further. Our results indicate that an increase in female labor force participation is indeed possible if the participation rate remains low in the most fertile ages. It turns out, however, that the optimal labor force participation for females strongly depends on the initial fertility pattern of the female population.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Note, that there are small intervals around the age of 20 and 65, where the Austrian labor force participation rate is slightly higher/lower than the Swedish/Italian rate for this short period. In these cases we use the Austrian rate as upper/lower bound for the control.
- 2.
Note that our model is based on aggregate period indicators, i.e. we consider age specific aggregate fertility and labor force participation of the whole Austrian population at a specific time period. Our model does not represent a life cycle model which would aim to replicate the life cycle decisions of individual.
- 3.
Note that we only consider full time employment.
- 4.
Note that in the arguments about the role of female labor force participation on fertility we assumed that only working females demand childcare facilities. Indeed our results would change once we introduce demand for childcare services by non working females as well.
- 5.
To estimate the parameters for the Gompertz function, we used data from Statistik Austria (2011b) that includes annual mortality rates from age 10 to 95. To get rates for even higher ages up to 110, we continued this trend.
- 6.
One may expect that the observed data exhibits the typical M-shaped form, which occurs due to the decline of female labor force participation in fertile ages. However, because women in paid maternity leave are counted as employed, this decline is less visible in countries with high social support. Austria, Sweden and Italy are examples for such countries with a comparatively long or well paid maternity leave period (see Fagan et al. 2007). Besides the fact that Sweden has an above average and Italy a below average labor force participation rate, the similarity in the shape with the one of Austrian data is another reason why we have chosen these two countries as boundaries. Further on note that due to the smooth shape of the data the estimation functions in Eqs. (21)–(23) yield the best fit. If, however, the data would exhibit a M-shaped from, other estimation functions would have to be used.
References
Alekseev, V., Tikhomirov, V., & Fomin, S. (1987). Optimal control. New York: Consultants Bureau.
Bryson, A. E., & Ho, Y. C. (1975). Applied optimal control. New York: Blaisdell.
Fagan, C., Smith, M., Anxo, D., Letablier, M., & Perraudin, C. (2007). Parental leave in European companies. Downloaded on 11th of October 2011. http://www.eurofound.europa.eu/pubdocs/2006/87/en/1/ef0687en.pdf.
Gibe, E., & Yntema, L. (1971). The shifted Hadwiger fertility function. Skandinavisk Aktuarietidskrift, 54, 4–13.
Gompertz, B. (1825). On the nature of the function expressive of the law on human mortality, and in a new mode of determining the value of life contingencies. Philosophical Transactions of the Royal Society, 115, 513–583.
Grass, D., Caulkins, J., Feichtinger, G., Tragler, G., & Behrens, D. (2008). Optimal control of nonlinear processes. Berlin: Springer.
Hadwiger, H. (1940). Eine analytische Reprodutionsfunktion für biologische Gesamtheiten. Skandinavisk Aktuarietidskrift, 23, 101–113.
OECD.StatExtracts. (2011). LFS by sex and age - indicators. Downloaded on 16th of May 2011. http://stats.oecd.org/Index.aspx.
Preston, S., Heuveline, P., & Guillot, M. (2001). Demography. Oxford: Blackwell.
Sage, A. S., & White, C. C. (1977). Optimum systems control. Englewood Cliffs, NJ: Prentice-Hall.
Statistik Austria. (2011a). Einjährige Fertilitätsziffern seit 1961. Downloaded on 16th of May 2011. http://www.statistik.at/web_de/statistiken/bevoelkerung/demographische_masszahlen/demographische_indikatoren/index.html.
Statistik Austria. (2011b). Jährliche Sterbetafeln seit 1947 für Österreich. Downloaded on 16th of May 2011. http://www.statistik.at/web_de/statistiken/bevoelkerung/demographische_masszahlen/sterbetafeln/index.html.
Sundt, B. (2004). Encyclopedia of actuarial science. Chichester: Wiley-Blackwell.
Vaupel, J., & Loichinger, E. (2006). Redistributing work in aging Europe. Science, 312(5782), 1911–1913.
Acknowledgements
This research was supported by the Austrian Science Foundation (FWF) under grant No P20408-G14
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2016 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Moser, E., Prskawetz, A., Feichtinger, G., Barakat, B. (2016). Maximizing Female Labor Force Participation in a Stationary Population. In: Dawid, H., Doerner, K., Feichtinger, G., Kort, P., Seidl, A. (eds) Dynamic Perspectives on Managerial Decision Making. Dynamic Modeling and Econometrics in Economics and Finance, vol 22. Springer, Cham. https://doi.org/10.1007/978-3-319-39120-5_10
Download citation
DOI: https://doi.org/10.1007/978-3-319-39120-5_10
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-39118-2
Online ISBN: 978-3-319-39120-5
eBook Packages: Business and ManagementBusiness and Management (R0)