How much his or her job loss influences fertility: A couple approach

Abstract

AbstractObjectiveWe analyze the effect of job loss on couple's fertility within 5 years, in the United Kingdom and Germany. We contribute to the literature by assessing to what extent a man's and a woman's job loss is consequential. Further, we study the effects based on couples' income, earnings division between partners, parental status, and women's age.BackgroundA job loss may decrease the couple's fertility as a drop in resources reduces parents' investments to devote to a newborn—or it may increase the risk of a new birth because a job loss reduces the opportunity cost of a birth, especially if the woman loses her job.MethodWe analyze couples from large population‐representative panel surveys in Germany (N = 15,029) and the United Kingdom (N = 15,932) containing yearly information about employment, relationship status, and fertility histories. We carry out estimates with linear probability models and inverse probability weighting methods.ResultsOur results show that men's and, to a large extent, women's job loss negatively affects the chances of birth, especially in the United Kingdom. The subgroups mostly hit are income‐egalitarian/female breadwinner and childless couples, with women in their mid‐20 s up to late 30 s in the United Kingdom; income‐egalitarian/male‐breadwinner families, with 35‐year to 40‐year‐old women and one child in Germany; middle‐income couples are relatively more affected in both countries.ConclusionA job loss makes couples less likely to have a child, particularly if the affected partner is a woman. The income effect jointly with other “unemployment scars” likely prevails on the reduction of opportunity costs of job loss.