IZA DP No. 9299: Short and Long-Term Effects of Unemployment on Fertility
published in: PNAS, 2014, 111(41), 14734-14739.
Scholars have been examining the relationship between fertility and unemployment for more than a century. Most studies find that fertility falls with unemployment in the short run, but it is not known whether these negative effects persist since women may simply postpone child bearing to better economics times. Using over 140 million U.S. birth records for the period 1975 to 2010, we analyze both the short and long-run effects of unemployment on fertility. We follow fixed cohorts of U.S. born women defined by their own state and year of birth, and relate their fertility to the unemployment rate experienced by each cohort at different ages. We focus on conceptions that result in a live birth. We find that women in their early 20s are most affected by high unemployment rates in the short-run and that the negative effects on fertility grow over time. A one percentage point increase in the unemployment rate experienced between the ages of 20 and 24 reduces the short-run fertility of women in this age range by 6 conceptions per 1,000 women. When we follow these women to age 40, we find that a one percentage point increase in the unemployment rate experienced at 20 to 24 leads to an overall loss of 14.2 conceptions. This long-run effect is driven largely by women who remain childless and thus do not have either first births or higher order births.