Objective
We 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.
Background
A 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.
Method
We 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.
Results
Our 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.
Conclusion
A 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.