Fertility reactions to the "Great Recession": theories and evidence

Joshua R. Goldstein, Max Planck Institute for Demographic Research
Liat Raz-Yurovich, Max Planck Institute for Demographic Research
Michaela Kreyenfeld, Max Planck Institute for Demographic Research

A number of competing theories have emerged about the effect of economic conditions on fertility. The current recession gives us a chance to assess these predictions in action. We first review the micro evidence from economic uncertainty literature and the predictions of economic theory for aggregate change. We then use macro-level data from the Human Fertility Database (HFD) to provide an overview on how the recent recession has shaped order and age specific fertility patterns in Europe. Overall, countries that were hit hard by the recession show a decline in fertility, in particularly at younger ages. However, the evidence is not as conclusive as one may wish, in particularly if one turns to order specific data. We speculate that the welfare state may mediate some of the adverse effect of the recession on fertility in some countries. Furthermore, we argue that different segments of the population may have responded differently to growing economic uncertainties. We buttress our argumentation by using prospective fertility and employment data from selected European countries. Our results indicate that the relationship between economic conditions and fertility is more multilayered than simple cross-correlations of aggregate fertility and employment measures suggest.

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Presented in Session 69: Fertility transition: the past and presence