In the 1960s, the average Indonesian woman had between five and six children. By the mid-1990s, the average number of children had declined to close to three per woman. A large part of this reduction in fertility has been attributed to the extensive family planning program that was initiated in the late 1960s under the regime of President Suharto. Contraceptive use among married women increased from 5 percent in the late 1960s to approximately 55 percent in the mid-1990s. While there is an extensive literature on the impact of the Family Planning Program on fertility rates and contraceptive use, there has been very little investigation of the program’s impact on other aspects of a woman’s life, such as labor force participation. This research investigates the impact of the Indonesian Family Planning Program on the labor force participation decisions and contraceptive choices of women.

I develop a discrete choice dynamic structural model, where each married woman in every period makes joint choices regarding the method of contraceptive used and the sector of employment. Each woman obtains utility from pecuniary sources, nonpecuniary sources, and choice-specific time shocks. In addition to the random shocks, there is uncertainty in the model, as a woman can only imperfectly control her fertility. Several forms of state and duration dependence capture dynamics in the model. Women in this model make different choices due to different preferences, differences in observable characteristics, and realization of uncertainties. The choices made by a woman depend on the compatibility between raising children and the sector of employment (including wages). While making decisions regarding contraceptive use, a woman considers the trade-off between the costs (monetary and nonmonetary) and benefits of having a child.

Contact Information:
Uma Radhakrishnan, ur5f@virginia.edu, University of Virginia