The OLS estimates in Tables 8 and 9 indicate that the correlation between fertility and likelihood of working is very small and statistically insignificant for mothers, but positive and statistically significant for fathers. In particular, if the analysis is separated by type of work, the presence of an additional child has a negative and statistically significant correlation with parents’ likelihood of working off-farm, being self-employed and also monthly earnings, but it has a positive and statistically significant correlation with both parent’s likelihood of working on-farm. Fertility also seems to be positively correlated with father’s likelihood of having a second occupation.

Although the OLS estimates suggest that parent’s withdrawal from the labor market or their further participation as a consequence of an increase in family size depend on the type of job they are performing, they should be taken with caution because they could well be biased. After correcting for the endogeneity problem, the second-stage results tell a completely different story. Once _same sex_ and _two girls_ are used as instruments, some of the IV estimates of the effect of fertility on parental labor-supply change sign and magnitude compared to the OLS estimates.

When using _same sex_ as an instrument for fertility, the IV estimates show that having an additional child (third order or higher) increases the likelihood of participating in the labor market for both parents, but most of these coefficients are statistically insignificant. One reason for this result may be linked to the fact that _same sex_ does not capture the exogenous variability of fertility as precisely as the _two girls_ instrument in the context of Albania, which may probably lead to imprecise estimates.

The IV estimates using _two girls_ as instrument indicate that there is a positive effect of fertility on mother’s likelihood of working off-farm and this coefficient is statistically significant at the 5% level. More specifically, having an additional child (third order or higher) increases on average a mother’s likelihood of working off-farm (+5 p.p), which represents a 30% increase in the average participation rate of mothers’ work off-farm. But, the presence of an additional child does not seem to have a statistically significant impact on mother’s likelihood of working on-farm or being self-employed. In addition, the two sets of IV estimates indicate that having an additional child seems to also have a positive and statistically significant impact on mother’s hours worked per week. To be more precise, each additional child increases the working time of a mother by about 4.4 - 4.6 hours per week. This coefficient is quite big given that it represents 26% of the average working time of the mothers in the sample.<sup>30</sup>

> 30A distinguishable characteristic of Albania during the years of this study is the combination of low fertility with low female participation rates. Female labor force participation has stagnated or even decreased during the last two decades despite a significant drop in fertility rates. The combination of these two stylized facts does not necessarily mean that there exists an inverse relation between fertility and female labor supply, as it has been stated in various developed countries. A study from Da Rocha and Fuster (2006) corroborates in part this mechanism. These authors find that labor market frictions determine how employment and fertility are associated across economies. In particular, they find that fertility and employment are positively associated across economies with low employment ratios (low probability of finding a job). On the other hand, they find that fertility and employment are negatively associated across economies with high probability of finding a job. Their findings also suggest that the sign of this relationship could change as the job-finding rate of females increases.

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