SOCIAL CONTESTS, WOMEN'S LABOUR FORCE PARTICIPATION AND INVESTMENT IN CHILDREN

Abstract

The choice between career and investment in children’s upbringing by staying at home is a tension educated women face in countries caught between old traditions and new economic prosperity. Norms play a big role in influencing couples’ choices. Using median families in terms of anticipated joint incomes earned as the benchmark for comparison, the thesis explores the implications of social externality from peer group choices among couples: how many children to have and wife’s job participation. The core exercise involves finding a fixed point in social interactions: heterogeneous couples compete to race ahead in the income ladder leading to (i) rising average household incomes, (ii) more female job participation, (iii) falling birth rates, and (iv) declining happiness index.