The objective of this research plan is to improve our undrstanding of the dynamic relationship between fertility and female labor force participation over the life cycle. Toward this end, we propose a three stage project. We shall first develop theoretical models of fertility and labor force participation decisions over the life cycle from an economic perspective. The model will characterize optimal decision rules for both of these choices at each state of the lif cycle, given uncertainty about future income and conception and will explicitly incorporate the woman's incentives for gaining market human capital via market work early in the life cycle. We next will develop econometric models of these decision rules which explicitly parameterize the theoretical structure, are tractable, and which can be applied to longitudinal data on females during their childbearing years. Finally, we propose an empirical analysis of these models using data from the Panel Study of Income Dynamics to test hypotheses derived from our theory and to examine the impact of demographic and background characteristics of women upon their conception and labor force participation decisions over the life cycle.
