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Clash of Career and Family: Fertility Decisions after Job Displacement

Author

Listed:
  • Del Bono, Emilia

    (ISER, University of Essex)

  • Weber, Andrea

    (Central European University)

  • Winter-Ebmer, Rudolf

    (Johannes Kepler University Linz)

Abstract

In this paper we investigate how fertility decisions respond to unexpected career interruptions which occur as a consequence of job displacement. Using an event study approach we compare the birth rates of displaced women with those of women unaffected by job loss after establishing the pre-displacement comparability of these groups. Our results reveal that job displacement reduces average fertility by 5 to 10% in both the short and medium term (3 and 6 years) and that these effects are largely explained by the response of white collar women. Using an instrumental variable approach we provide evidence that the reduction in fertility is not due to the income loss generated by unemployment but arises because displaced workers undergo a career interruption. These results are interpreted in the light of a model in which the rate of human capital accumulation slows down after the birth of a child and all specific human capital is destroyed upon job loss.

Suggested Citation

  • Del Bono, Emilia & Weber, Andrea & Winter-Ebmer, Rudolf, 2008. "Clash of Career and Family: Fertility Decisions after Job Displacement," IZA Discussion Papers 3272, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3272
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    More about this item

    Keywords

    human capital; plant closings; unemployment; fertility;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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