Short- and long-term effects of unemployment on fertility

Edited by Kenneth W. Wachter, University of California, Berkeley, CA, and approved September 3, 2014 (received for review May 14, 2014)
September 29, 2014
111 (41) 14734-14739

Significance

Fertility falls when unemployment rises, but there may be no long-run effect if women simply postpone childbearing. We analyze the effects of unemployment by following fixed cohorts of US-born women defined by their own state and year of birth. We find that a one percentage point increase in the unemployment rate experienced between the ages of 20 and 24 reduces the short-run fertility of women in this age range by six conceptions per 1,000 women. When these women are followed to age 40, a one percentage point increase in the unemployment rate experienced at 20 to 24 is associated with an overall loss of 14.2 conceptions. This larger long-term effect is driven largely by women who remain childless.

Abstract

Scholars have been examining the relationship between fertility and unemployment for more than a century. Most studies find that fertility falls with unemployment in the short run, but it is not known whether these negative effects persist, because women simply may postpone childbearing to better economic times. Using more than 140 million US birth records for the period 1975–2010, we analyze both the short- and long-run effects of unemployment on fertility. We follow fixed cohorts of US-born women defined by their own state and year of birth, and relate their fertility to the unemployment rate experienced by each cohort at different ages. We focus on conceptions that result in a live birth. We find that women in their early 20s are most affected by high unemployment rates in the short run and that the negative effects on fertility grow over time. A one percentage point increase in the average unemployment rate experienced between the ages of 20 and 24 reduces the short-run fertility of women in this age range by six conceptions per 1,000 women. When we follow these women to age 40, we find that a one percentage point increase in the unemployment rate experienced at ages 20–24 leads to an overall loss of 14.2 conceptions. This long-run effect is driven largely by women who remain childless and thus do not have either first births or higher-order births.

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Published in

Go to Proceedings of the National Academy of Sciences
Go to Proceedings of the National Academy of Sciences
Proceedings of the National Academy of Sciences
Vol. 111 | No. 41
October 14, 2014
PubMed: 25267622

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Submission history

Published online: September 29, 2014
Published in issue: October 14, 2014

Notes

This article is a PNAS Direct Submission.
We also can construct quarterly or monthly conception rates. However, there are strong seasonal patterns in conception rates (14) as well as in the unemployment rate, which might confound an analysis at the quarterly or monthly level.
For a general reference on instrumental variable regressions, see Angrist and Pischke (15), chapter 4.
§
There is a stronger tendency to catch up in terms of childlessness than in completed fertility. This is because a woman who is childless at, say, age 30 may go on to have one child before age 40, but is less likely to have two or more children than a woman who started childbearing earlier.
As Bongaarts and Feeney (18) explain, “Neither the [total fertility rate] nor the [adjusted total fertility rate] attempts to estimate the completed fertility of any actual birth cohort, nor do they attempt any prediction of future fertility.”
Until 1990, the census included a question about the total number of children ever born. Unfortunately, because state-level unemployment rates are available only after 1976, the cohorts of women that could be included in analyses using this measure are all below age 30 in 1990 (SI Appendix, Fig. S5); therefore, these measures of completed fertility are not useful for our purposes.
**On the other hand, Kondo (29) uses longitudinal data from the Survey of Income and Program Participation (SIPP) to examine the effect of contemporaneous differences in male and female unemployment rates on fertility. She does not find a significant effect, but the cohorts available in SIPP are very small.
††
Five-year unemployment rate, 2004–2008: 5.12; 2008–2012: 8.34; difference: 3.22. Long-term effect on conceptions: 3.22*(−14.21) /1,000*9.2m; 1 conception = 1.014 births. Long-term effect on childless women: 3.22*(−0.51) /100*9.2m.

Authors

Affiliations

Janet Currie1 [email protected]
Center for Health and Wellbeing, Princeton University, Princeton, NJ 08540
Hannes Schwandt
Center for Health and Wellbeing, Princeton University, Princeton, NJ 08540

Notes

1
To whom correspondence should be addressed. Email: [email protected].
Author contributions: J.C. and H.S. designed research, performed research, contributed new reagents/analytic tools, analyzed data, and wrote the paper.

Competing Interests

The authors declare no conflict of interest.

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    Short- and long-term effects of unemployment on fertility
    Proceedings of the National Academy of Sciences
    • Vol. 111
    • No. 41
    • pp. 14637-14959

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