Fertility and the Business Cycle: The European Case

Bellido, Héctor and Marcén, Miriam (2016): Fertility and the Business Cycle: The European Case.

Abstract

This paper analyzes the role of the business cycle in fertility, using data from 30 European countries for the period 1991 to 2013. We find that the unemployment rate, utilized as a proxy for the evolution of the business cycle, negatively affects the fertility rate, at least in the short term. This is maintained even when we control for the welfare generosity of the European countries, and for other socio-economic variables and unobservable characteristics that can vary by country and/or over time. Our results suggest that fertility decisions behave in a pro-cyclical way, although the effect of the business cycle variations is quite moderate. By age of women, we observe differences in the response of the fertility rate, with the impact of economic problems being lower for those who are at the end of their childbearing years. Supplementary analysis, developed to explore the impact of the business cycle on the entire distribution of the fertility rate, indicates that the effect of the unemployment rate varies considerably, having a strong effect on the fertility rate at higher quantiles, corresponding with higher fertility rates.

• Item Type: MPRA Paper
• Language: English
• Keywords: Fertility, unemployment, business cycle
• Subjects: J - Labor and Demographic Economics > J1 - Demographic Economics > J13 - Fertility ; Family Planning ; Child Care ; Children ; Youth; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J64 - Unemployment: Models, Duration, Incidence, and Job Search

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