Furthermore, the correlation between sibling’s sex-composition and the probability of additional childbearing is even stronger for mothers whose two first children are girls, reaching a statistically significant difference of 26 percentage points compared to mothers with a different sex-composition. For instance, estimates in column (1) indicate that around 61,4% of Albanian mothers with two girls have a third child compared to only 36,4% for those with two boys or even less for those with a mixed sex combination. Columns (2) and (3) indicate that fertility rate is higher in rural areas compared to urban areas and that parental preferences for sibling’s sex-composition differ slightly by rural-urban decomposition, but the same pattern remains in both areas. These correlations suggest that Albanian parents have a clear preference for sons, which is slightly more pronounced in rural areas compared to urban areas.<sup>15</sup> Overall, even though the total fertility rate has declined during the period studied, fertility patterns following _two girls_ demonstrate the persistence of parental preference for sons. This result also indicates that, for Albanian parents, balancing the sex-composition of their children is not as preferred as having sons because if they did, they should want to have a girl if they already had two boys and this does not seem to be happening.<sup>16</sup>

# **5.3 The Exclusion Restriction**

In addition to the relevance condition, the exclusion restriction requires that the sibling sexcomposition has no correlation with other factors directly affecting labor-force participation other than through its impact on fertility. This condition means that it is of primary interest that the instrument has an as close a resemblance as possible to a random assignment. Basically, sibling sex-composition is supposed to be unrelated to any unobserved factors that might affect parental labor supply because in essence it is virtually randomly assigned by a biological natural phenomenon.

Even though the sex of a child is plausibly randomly assigned, there exist several concerns that might put this statement into doubt and threaten the identification strategy of this analysis. One important concern is the prevalence of the sex-selective abortions in Albania. In view of a manifest preference for sons, the ratio of men to women has recorded a significant rise since the mid-1990s due to the legalization of abortion and also the modernization of the available

> 15Figure 4 shows a graphical representation of Table 4 each one of the four databases used in this study. Mothers who give birth to a girl followed by another girl have a much higher fertility than those who give birth to mixed sex siblings or two boys in a row. On the contrary, mothers who give birth to _two boys_ in a row are less likely to have an additional child compared to those with an otherwise sex-mix.

> 16It is important to notice that the relationship between sibling’s sex composition and further childbearing is confirmed in each one of the databases used in this study (LSMS and DHS surveys). This is important because, unlike the 2005 and 2012 LSMS surveys where information about fertility is partly based on my own household matching between the children and their corresponding parents, the 2002 LSMS and 2008-09 DHS contain detailed fertility histories for each parent, including information on the dates of birth and sex of each child among others. This serves as a cross check for the relevance condition of the instrument. Tables A-2 and A-3 in the Appendix report estimates of the impact of child sex and sibling’s sex-composition on fertility for each one of the four surveys.

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