The Effect of Job Displacement on Couples’ Fertility Decisions

This paper analyzes the effects of job displacement on fertility using Finnish longitudinal employer-employee data (FLEED) matched to birth records. We distinguish between male and female job losses. We focus on couples where one spouse has lost his/her job due to a plant closure or mass lay off and follow them for several years both before and followingthe job loss. As a comparison group we use similar couples that were not affected by job displacement. In order to examine the possible channels through which job loss affects fertility we examine also the effect on earnings, employment and divorce. The results show that a woman’s own job loss decreases fertilitymainly for highly educated women. For every 100 displaced females there are approximately 4 less childrenborn. A man’s job loss has no significant impact on completed fertility.