Fertility and Parental Labor-Force Participation: New Evidence from a Developing Country in the Balkans * (First Draft) Iva Trako † September 6, 2015 Abstract This paper examines the effect of fertility on parental labor-force participation in a developing country. In order to address the potential endogeneity in the fertility decision, I exploit Albanian parental preference for having sons as an exogenous source of variation. Using a repeated cross-section, I find that having an additional child has a positive and statistically significant effect on parental labor-force participation. IV estimates for mothers show that they increase labor supply, especially in terms of hours worked per week and the likelihood of working off-farm. Similarly, father’s likelihood of working off-farm and having a second occupation increase as a consequence of further childbearing. The heterogeneity analysis suggests that this positive effect might be the result of two plausible mechanisms: childcare provided by non-parental adults in extended families and greater financial costs of feeding more children. JEL Classification: J13, J22, C26 Keywords: fertility, parental labor-force participation, instrumental variables ∗ I would like to thank and recognize my advisor Karen Macours for her special support and guidance on the elaboration of this paper. Helpful comments and advice from Ekaterina Zhuravskaya, Marc Gurgand, Ivan Torre and Martin Rossi are also gratefully acknowledged. The views expressed in this paper are those of the author and do not necessarily represent those of Paris School of Economics. I am responsible for all remaining errors. † Correspondence: Department of Economics, Paris School of Economics, 48 Boulevard Jourdan, 75014, Paris, Tel.: 00 33 6 64 56 90 66, Email: ivatrako@gmail.com.