Job Displacement and First Birth Over the Business Cycle

53 Pages Posted: 22 Jan 2017

See all articles by Barbara Hofmann

Barbara Hofmann

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Michaela Kreyenfeld

Max Planck Institute for Demographic Research

Arne Uhlendorff

IZA Institute of Labor Economics

Date Written: January 2017

Abstract

This paper investigates the impact of job displacement on women's first birth rates, and the variation in this effect over the business cycle. We used mass layoffs to estimate the causal effects of involuntary job loss on fertility in the short and medium term, up to five years after displacement. Our analysis is based on rich administrative data from Germany, with an observation period spanning more than 20 years. We apply inverse probability weighting (IPW) to flexibly control for the observed differences between women who were and were not displaced. To account for the differences in the composition of the women who were displaced in a downturn and the women who were displaced in an upswing, a double weighting estimator was employed. We find that the extent to which job displacement had adverse effects on fertility depended on the business cycle. The first birth rates of the women who were displaced in an economic downturn were much lower than the first birth rates of the women who lost a job in an economic upturn. This result cannot be explained by changes in the observed characteristics of the displaced women over the business cycle.

Keywords: fertility, job loss, mass layoffs, business cycle, unemployment

JEL Classification: J13, J64, J65

Suggested Citation

Hofmann, Barbara and Kreyenfeld, Michaela and Uhlendorff, Arne, Job Displacement and First Birth Over the Business Cycle (January 2017). IZA Discussion Paper No. 10485. Available at SSRN: https://ssrn.com/abstract=2903107

Barbara Hofmann (Contact Author)

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

Michaela Kreyenfeld

Max Planck Institute for Demographic Research ( email )

Doberaner Str. 114
Rostock 18057, 53113
Germany

Arne Uhlendorff

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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