Economic uncertainty and family formation: evidence from German panel data

Michaela Kreyenfeld, Max Planck Institute for Demographic Research
Dirk Konietzka, Max Planck Institute for Demographic Research

Besides changes in the economic role of women, increasing economic uncertainties are regarded as driving forces behind the recent postponement of fertility. In this paper, we analyze how economic uncertainty influences the transition to first and subsequent births in West Germany. We use data from the German Socio-Economic Panel which provides longitudinal information on education, employment, partner characteristics as well as subjective measures of economic uncertainty for the period 1984 to 2003. We do not find evidence for a universal negative impact of economic uncertainty on fertility. Instead, our results indicate that there is heterogeneity in how an insecure economic situation affects the decision to have children. Unemployment delays family formation primarily among the highly educated women. The partner’s higher education is one of the most influential determinant for higher order birth risks.