Living in an extended family has become more common around the globe, including in the United States, where the number of people living in multigenerational households has quadrupled in the last five decades. But Latin America, along with Northern Africa, is the region where multigenerational living is most common.
This has important policy implications, not least because multigenerational families can share income as well as important aspects of labor support, like childcare. This affects both male and female employment. Indeed, the social safety network of three-generation households allows its members to allocate their time differently both inside and outside the home in ways that are important to understand in guiding targeted policy in the broader Latin American and Caribbean region.
Take the case of Mexico where the share of three-generation households has steadily increased over the last 15 years by nearly 20% in urban and rural settings (Figure 1), so that today one-fifth of the country’s population lives in such homes. One of the most interesting aspects of this development is its influence on societal changes, most especially in the 5% (1.9 percentage point) increase in female labor force participation from 2005-2020.
A New Dataset on Three-Generation Households
The Inter-American Development Bank recently published a novel dataset on three-generation households in Mexico during that period. The project identified three-generation homes from 61 quarterly Occupation and Employment Surveys conducted by the Mexican Statistical Authority (INEGI). It includes data on over 200,000 homes and more than 1.2 million people. Individual data includes, among other variables, gender, educational attainment, marital status, employment, income, and hours worked. It also incorporates childcare information, costs, and the time dedicated to providing care from the National Survey of Employment and Social Security (ENESS).
Figure 1. Share of the Population in Three-Generation Households
The gender gap in three-generation households (distance between dotted lines, Figure 2) is significantly smaller, almost half, than that of other households (distance between solid lines, Figure 2). Two forces contribute to this reduction: men in three-generation households are less likely and women more likely to be employed.
Women could have a higher employment rate because grandmothers provide childcare. A recent IDB study shows that a grandmother’s death dramatically reduces a mother’s labor force participation in three-generation households. At the same time, the increase in female employment and the employment of other household members, such as the grandfather, may have an income effect on the larger household, decreasing men’s incentive, on average, to work.
Figure 2: Share of Women and Men Employed by Type of Household
These dynamics affect broader social changes. With more women living in three-generation households (3 percentage points more), and women in these households more likely to be employed (19% or 7 percentage points more), the increase in the share of women living in three-generation households could account for almost 12% of the rise in female labor force participation in Mexico in the last 15 years.
Differences in Time Dedicated to Work in Three-Generation Households
Three-generation household members not only differ from other households in the likelihood of being employed, they also differ in the number of hours worked. Employed men and women are likelier to work 35 or more hours a week (full-time) if they live in such homes, probably because other household members, like grandmothers, ease the childcare concern for both parents. However, the increase in the probability of being employed full-time is noticeably greater for women. Employed women in three-generation households are more than 50% more likely to be employed full-time, an increase more than three times the magnitude we observe in men.
Figure 3: Hours Worked by the Employed by Type of Household (2019)
Among many other differences, three-generation households have smaller gender gaps in terms of both labor force participation and hours worked. This, together with rise in the share of three-generation households, is a critical component in understanding important changes in the labor market, gender issues, time allocation and, perhaps even, societal values.