Working Paper: CEPR ID: DP6719
Authors: Emilia Del Bono; Andrea Weber; Rudolf Winter-Ebmer
Abstract: In this paper we investigate how fertility decisions respond to unexpected career interruptions, which occur as a consequence of job displacement. Using an event study approach we compare the birth rates of displaced women with those of women unaffected by job loss after establishing the pre-displacement comparability of these groups. Our results reveal that job displacement reduces average fertility by 5 to 10% in both the short and medium term (3 and 6 years) and that these effects are largely explained by the response of white-collar women. Using an instrumental variable approach we provide evidence that the reduction in fertility is not due to the income loss generated by unemployment but arises because displaced workers undergo a career interruption. These results are interpreted in the light of a model in which the rate of human capital accumulation slows down after the birth of a child and all specific human capital is destroyed upon job loss.
Keywords: fertility; human capital; plant closing; unemployment
JEL Codes: J13; J24; J64; J65
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Job displacement (J63) | Average fertility (J19) |
| Job displacement (J63) | Career interruptions (J63) |
| Career interruptions (J63) | Average fertility (J19) |
| Unemployment (J64) | Average fertility (J19) |
| Job displacement (J63) | Income loss from unemployment (J65) |