reproductive equipment, reaching 114 male births per 100 female births around 2005 (UNFPA, 2012). Hence, if the parents who prefer to have sons or the mothers who want to return to work are willing to engage in sex selection, the instrument will not be randomly assigned. Despite the fact that Albania has a high male-female ratio, the evidence from the sample of mothers and fathers used in this paper suggests that the sex-ratio at first and second order births is very close to the natural rate, which makes this issue a minor concern (see Tables 1 and 4).<sup>17</sup> Another simple way to check whether the instrument is as good as random is to examine whether parents differ in demographic characteristics by the sex-compositions of their two first children (Angrist and Evans, 1998; Ag ̈uero and Marks, 2008). The idea is that if there is no correlation between the instrument and other variables affecting parental labor supply, then there should be no systematic differences in demographic characteristics between parents who have same-sex and mixed-sex sibling compositions, and similarly between those who have two girls and another sibling composition or two boys and otherwise. Examples of such variables are _age, age at first birth, years of education, rural area_ and _religion_ .

Table 5 reports the difference in means in demographic characteristics between parents (mothers and fathers) with different sibling’s sex-composition (same-sex, two girls and two boys). Columns (1) and (4) indicate that mothers (fathers) with children of the same sex and those with children of mixed-sex, have similar demographic characteristics before the treatment, that is, the arrival of the third child. The rest of the estimates in Table 5 show that in general there are no statistically significant differences in demographic characteristics between parents with two boys and those with another sibling composition, and also between those with two girls and otherwise, except for the variable _age_ . Parents with two girls and just the fathers with two boys seem to be slightly older than those with another sibling composition. The magnitude of these differences represents only 1% of the sample means of age for mothers and fathers, which is quite small. However, the variable _age_ is used as a control in all the specifications of the paper in order to avoid any concerns.

Another possible threat to the validity of the exclusion restriction in this identification strategy is put forward by Rosenzweig and Wolpin (2000). They argue that having mixed sex siblings may violate the exclusion restriction by directly affecting both the marginal utility of leisure and child rearing costs and, thus, labor-force participation. For example, if spending on various child-related goods is different for parents who have a son versus those who have a daughter, the analysis will be contaminated by the direct impact of a child’s sex on childcare costs. Using Indian data, they find that expenses for clothing of the third child are significantly lower if the older siblings are of same sex. They attribute this effect to “hand-me-down” savings, which are

> 17Several methods to discriminate among unborn girls co-exist today in the world. The most recent methods are based on pre-conception selection and require access to the elaborate equipment necessary to perform sperm sorting, pre-implantation genetic diagnosis (PGD) or in-vitro fertilization (IVF). Cost and accessibility factors, however, restrict these technologies to developed countries and to the most affluent populations. These services were not generally offered by the public health service in Albania during the period studied. On the contrary, sex selective abortions offer a far easier and more accessible route to avoid female births (UNFPA, 2012).

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