Effects of grandmothers' proximity on mothers' labour force participation

Abstract

This paper investigates the causal effects of grandmothers’ geographical proximity onlabour supply decisions of married women with young children by leveraging a noveldata set from Turkey. We deal with the reverse causality and endogeneity problemsarising from mothers’ and grandmothers’ joint location and labour supply decisions byimplementing a two-stage least squares estimation method using the number of alivegrandmothers as an instrument. We argue that grandmothers’ proximity can increasemothers’ labour supply through their free and flexible childcare services. On the otherhand, geographically close grandmothers can reduce mothers’ labour supply by imposingthe traditional gender norms prevalent in Turkey or requiring them to take on elderlycaregiving duties. The overall effect depends on the relative size of these opposing factors.Our findings suggest that living in the same neighbourhood as grandmothers increasesthe probability of labour force participation and the employment rates of women withyoung children by 18.2 ppt and 16.4 ppt, respectively. These results are mostly driven bythe non-village sample. The ‘traditional gender norm’ channel explains the insignificantimpact of grandmothers’ proximity on the labour market outcomes of mothers who havebeen raised in villages.