Women’s Wages and Fertility Revisited Evidence from Norway

Abstract

The prediction of New Home Economics of a negative effect of female wages on fertility has been tested in a number of studies, but the results are far from unanimous. This article contributes with new evidence based on registry data covering all Norwegian women born in 1955–1974 and a simultaneous hazard model of transitions to first, second and third birth. We find a U-shaped relationship between wages and the log hazard for all cohorts, however, varying in strength and across parity. In transitions to first birth, most women are likely to be on the downward slope of the curve, implying that the wage effect is mainly negative. In transitions to second and third birth, most women are likely to be on the upward slope of the curve, where the wage effect is positive. The results are not very sensitive to the omission of education and income of the spouse.