Abstract
Economic growth and modernization of society are generally associated with fertility rate decreases but which forces trigger this is unclear. In this paper we assess how fertility changes with increased labor market participation of women in rural Senegal. Evidence from high-income countries suggests that higher female employment rates lead to reduced fertility rates but evidence from developing countries at an early stage of demographic transition is largely absent. We concentrate on a rural area in northern Senegal where a recent boom in horticultural exports has been associated with a sudden increase in female off-farm employment. Using survey data we show that employed women have a significantly higher age at marriage and at first childbirth, and significantly fewer children. As causal identification strategy we use instrumental variable and difference-in-differences estimations, combined with propensity score matching. We find that female employment reduces the number of children per woman by 25%, and that this fertility-reducing effect is as large for poor as for non-poor women and larger for illiterate than for literate women. Results imply that female employment is a strong instrument for empowering rural women, reducing fertility rates and accelerating the demographic transition in poor countries. The effectiveness of family planning programs can increase if targeted to areas where female employment is increasing or to female employees directly because of a higher likelihood to reach women with low-fertility preferences. Our results show that changes in fertility preferences not necessarily result from a cultural evolution but can also be driven by sudden and individual changes in economic opportunities.