Essays on fertility choices and labor market inequality

This dissertation combines three essays studying the relationship between fertility decisions and labor market inequality. The first chapter studies the effect of providing abortions for free on women's fertility decisions and career outcomes. The second chapter looks at the importance of family's income on access to better paying firms. The third chapter studies how does growing up relatively poor or rich in school affects human capital labor-market outcomes in adulthood. In Chapter 1 we study the effects of abortion access on fertility and women's career outcomes. To establish causality, we leverage a policy change that in 2014 increased the eligibility age cutoff for free abortion in Israel. We use newly constructed administrative data that allows us to track abortions, births, employment, earnings, and formal education for the universe of Israeli women over a seven-year period. We show that access to free abortion increases the abortion rate but does not increase conceptions. Instead, the result is driven by more abortions among poor women who live in religious communities in which abortion is socially stigmatized. This finding suggests that when abortion is free, poor women do not need to consult family members for financial support, which allows them to have an abortion in private. In the medium-run, access to free abortion delays parenthood, increases human capital investment, and shifts employment towards the white-collar sector, suggesting a large career opportunity cost of unplanned parenthood. Finally, we show that if the government's objective is to remove financial constraints to abortion access, means-tested funding does a better job than the existing age-based policy. In Chapter 2 we revise the intergenerational mobility literature from the firm's perspective. It has been widely documented that there is a strong relationship between parents and children's earnings. A separate strand of the inequality literature has shown that differences in firm pay premiums contribute substantially to the distribution of earnings. In this paper, we quantify the role of access to better-paying firms on intergenerational mobility in Israel. Using job switchers to identify firm wage premiums, we find that differences in access to better-paying firms are responsible for 17% of the intergenerational earnings elasticity. About half of this pattern is due to the fact that firms amplify the effect of worker's productivity. Another quarter is due to sorting of certain ethnicities to better paying firms. In Chapter 3 we ask -- How does growing poor (or rich) relative to one's peers predict lifetime earnings? Using administrative data of the entire Israeli population, we answer this question in the context of childhood location and school environments. We condition on family resources and locations. Our preliminary results suggest locally rich kids have higher earnings in adulthood compared to their peers from median earning households in their city. Furthermore, being of high rank within a locality boosts one's high-school and post-secondary degree diploma

Keywords: Economics.
Advisor: Abramitzky Ran
Einav Liran
Persson Petra
Sorkin Isaac