Job Displacement and Fertility over the Business Cycle

Barbara Hofmann, University of Mannheim and Institute for Employment Research (IAB)
Michaela Kreyenfeld, Max Planck Institute for Demographic Research
Arne Uhlendorff, University of Mannheim

We study the effect of job displacement on female fertility and investigate whether the effect varies with the business cycle at displacement. We use rich administrative data from Germany with an observation period spanning over 27 years and exploit mass-layoffs as a quasi-experiment to estimate the causal effect of job loss on fertility in the short- and longer-run. In line with the literature we find preliminary evidence for at least medium run adverse effects of job displacement on female fertility. Our contribution is to vary the effect with the business cycle at displacement. Our preliminary findings suggest that the effect is stronger if the woman was laid off in an economic downturn. Our study contributes to understanding the relationship between unemployment and birth rates.