IMPACT OF WOMEN’S RETIREMENT ON THEIR DAUGHTER IN LAW’S EMPLOYMENT

Abstract

Using a fuzzy regression discontinuity design and a cross-pooled MICS data set for the years; 2011 and 2014, this research measures the impact of mother-in-law’s retirement on their respective daughter in law’s employment decision using retirement age as a cutoff. Female labor force participation has remained low in developing countries mainly due to the presence of young children in the house. This study argues that presence of grandmothers, to a large extent can play a vital role in eliminating this pressure but also can add to the constraints faced by the women and hence affecting the labor force participation negatively. Numerous researches done on developed countries highlight that the decision regarding formal or informal childcare depends on the availability and costs of the formal institutions. However, all these researches report a positive impact of childcare on female’s labor force participation. This study extends this analysis to a case of developing country Pakistan, where the household dynamics and constraints faced by the households are quite different from that of developed world to see whether the impact remains the same or not. The results reveal that a retired mother-in-law has a significant negative affect on their daughter in law’s employment especially for the women living in rural areas, lesser educated and belonging to a lower wealth quantile. These insights are useful for policy makers as the results indicate the need for an affordable formal child-care institution for working mothers as well as provide health care services to senior citizens to some extent as these two groups are the main reason why females have to opt out of labor force in order to take care of them.