Family proximity and the labor force status of women in Canada

Abstract

In this paper, I examine the effect of family co-residence and proximity on the labor force participation and working hours of Canadian women. I find lower labor market attachment for married women without young children who co-reside with their mothers (those women most likely to care for their elderly mothers) and for married women with young children who live more than half a day away from their mothers (those women least likely to benefit from the availability of family provided childcare). I find no effect of proximity for single women with children on the extensive margin, but do find that they work fewer hours if they live far from their mothers. The results hold only for proximity to living mothers (as opposed to proximity to widowed fathers), suggesting that it is the mothers themselves, and not merely the home location, that drives the results. I incorporate IV estimation using province of birth and whether one was born in the same province of either parent to estimate proximity, and find consistent results. To the extent that the positive effect of close proximity is related to the availability of grandchild care, policies that impact the labor force behavior of grandmothers may also impact the labor force behavior of their daughters. Regional patterns in proximity suggest that national childcare and labor market policies may yield different results across the country.