Economic Uncertainty and Fertility

Sociologists and demographers have long been interested in the role of economic uncertainty in family behavior. Despite the prevailing "bourgeois conviction" that economic uncertainty discourages people from having children, the empirical evidence on this issue is mixed. In this paper, I summarize the recent empirical evidence, and discuss the potential limitations of previous investigations. Among the possible shortcomings of these studies is that many relied exclusively on unemployment as an operational definition of labor market uncertainty. Subjective indicators of economic uncertainty, which measure the individual's perception of his or her economic situation more directly, often were not available to researchers. Moreover, few of these studies explored group-specific differences in behavior. In this paper, we seek to overcome some of the limitations of these earlier analyses. Based on data from the German Socio-Economic Panel (GSOEP), we study the role of perceived economic uncertainty in transitions to first and higher order births for the period 1990-2013. In addition, we examine how different population subgroups (stratified by education, parity, and age) respond to economic uncertainty.