Comparative Advantage, International Trade, and Fertility

Abstract

We analyze theoretically and empirically the impact of comparative advantage in international trade on fertility. We build a model in which industries differ in the ex- tent to which they use female relative to male labor, and countries are characterized by Ricardian comparative advantage in either female- or male-intensive goods. The main prediction of the model is that countries with comparative advantage in female- intensive goods are characterized by lower fertility. This is because female wages, and therefore the opportunity cost of child-rearing are higher in those countries. We demonstrate empirically that countries with comparative advantage in industries employing primarily women exhibit lower fertility. We use a geography-based instrument for trade patterns to isolate the causal effect of comparative advantage on fertility