The effect of a newborn on the household labour supply

Abstract

This master’s thesis investigates the effect of a newborn on household members’ labour market status. With this goal in mind, we use data from the Spanish Household Budget Survey and causal inference methods to estimate the effect of a newborn on couples’ participation in the labour force. In particular, we focus on the effect on the main breadwinner of the household and the spouse. The results indicate that spouses reduce their labour participation in about 5% while main breadwinners labour supply is not affected significantly. The same effect is obtained when the analysis is carried out by gender, with women reducing their labour force participation in about the same figure and men having no significant response.