Local Labor Market and Fertility: Evidence from the Trade Liberalization in Brazil

This paper analyzes the effects of local labor market conditions on fertility behavior. The empirical strategy exploits exogenous shock in the demand for local labor generated by Brazil’s trade liberalization in the 1990s. Our results show that adverse shocks to regional employment opportunities created by an increased exposure to international competition affects fertility rates. The results show that local labor markets less exposed to international competition had the reduction in fertility rates. We estimate a decrease of 3.8% in fertility rates when moving from the 90th percentile to the 10th percentile of the tariff change distribution.