The Effect of Residential Location and Housing Unit Characteristics on Labour Force Participation of Childbearing Women in Indonesia: Using Twin Births As A Quasi-Natural Experiment

Abstract

I empirically investigated the influence of residential location and housing unit characteristics on the labor force participation of childbearing women by applying quasi-experimental methods and taking a developing country’s perspective – where the family size tends to grow faster.  While the choices of residential location and housing unit characteristics are rarely exogenous, it is important to deal with the endogeneity  problem. I use instrumental variable models, with twin births and gender composition as the exogenous sources of variation in the family size, and exploit an enormous micro dataset from the Indonesian Census Population 2010. Previous works of literature have examined the effect of twin birth on the female labor supply, but less attention given to the housing decision. This study provides new evidence of a forward-looking behavior about the residential location and housing consumption due to household size effects and shows that such behavior will most likely influence the female labor supply.

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