The rise in female labour supply in developed economies has stimulated research on the combination of family and work. The aim of this thesis is to provide some empirical evidence on the factors driving family formation and mothers' employment across Europe over the period 1960-2000. After the Introduction, Chapter 2 describes a theory to explain the elements (e.g. public provided childcare, taxation system, subsidies to childcare, flexi-time at work, and unemployment rates) that affect the sign of the correlation between fertility and employment. The two subsequent chapters are both divided into two core sections: a Spanish case and a comprehensive European comparison (Belgium, West-Germany, Italy, Spain and Sweden). Chapter 3 analyses how the labour market affects individual fertility decisions (i.e. marriage/cohabitation, first, second and third birth) using a Cox hazard approach. Results suggest that if we would like to reverse the declining path in fertility in Spain, we need to accomplish three main things: overturn the negative impact of female employment on childbearing through policies that facilitate reconciliation of work and family, reduce the instability of working patterns, and implement policies that raise male employment. Interestingly, the cross-country comparison reveals that Sweden is the only country where being employed encourages earlier childbearing. Chapter 4 investigates transitions from employment to non-employment around childbearing and its evolution across time. The European comparison suggests that the probabilities of staying-on employed are different across countries and these have changed substantially over the period 1973-93. This evolution is mainly explained by the taxation system (joint vs. separate), the removal of barriers to part-time work and the increase in education. Chapter 5 focuses on female employment in the UK between 1974-2002. A first section aims to quantify how much of the rise in female participation is due to changes in the structure of the female population and how much is caused by changes in behaviour. A second section investigates the rise in the employment of married mothers. We isolate those birth cohorts whose mothers experienced significant increases in employment and relate those to changes in policies (maternity rights, taxation and childcare). Maternity rights have induced a change in behaviour toward returning to work in the first year post-birth, mostly among better-educated and higher-paid mothers