Female labour participation with concurrent demographic processes: an estimation for Italy

This paper sets out to measure the “true” influence of partnering and fertility decisions on women’s participation in the labour market in Italy in 2002. Our model is rather complex for the following reasons. Firstly, because we consider several demographic processes, all of which are potentially affected by endogeneity (i.e. are in turn influenced by labour market decisions). Secondly because we use a cross sectional data source with retrospective questions, which calls into question two additional issues: selectivity and treatment effects. Selectivity arises because only a few, non-random individuals (women in our case) are observed in a given state (e.g. at work, or with children). Treatment effects arise because certain experiences of the past (e.g. having found a husband), may later put a woman on a different life course, which affects her approach towards family formation and labour participation. After a quick look at the main issues at stake and the solutions offered by the relevant literature , we present our model and the data (Bank of Italy, SHIW dataset). The results that we obtain are discussed in the light of the institutional setting that characterizes Italy.