IDEAS home Printed from https://ideas.repec.org/p/rco/dpaper/69.html
   My bibliography  Save this paper

The Impact of a Negative Labor Demand Shock On Fertility - Evidence From the Fall of the Berlin Wall

Author

Listed:
  • Liepmann, Hannah

    (Humboldt University Berlin)

Abstract

How does a negative labor demand shock impact fertility? I analyze this question in the context of the East German fertility decline after the fall of the Berlin Wall in 1989. I exploit differential pressure for restructuring across East German industries which led to unexpected, exogenous, and permanent changes to labor demand. I find that throughout the 1990s, women more severely impacted by the demand shock had relatively more children than their less-severely-impacted counterparts. Thus, the demand shock did not only depress the aggregate fertility level but also changed the composition of mothers. My paper shows that these two effects do not necessarily operate in the same direction.

Suggested Citation

  • Liepmann, Hannah, 2018. "The Impact of a Negative Labor Demand Shock On Fertility - Evidence From the Fall of the Berlin Wall," Rationality and Competition Discussion Paper Series 69, CRC TRR 190 Rationality and Competition.
  • Handle: RePEc:rco:dpaper:69
    as

    Download full text from publisher

    File URL: https://rationality-and-competition.de/wp-content/uploads/discussion_paper/69.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Rajeev Dehejia & Adriana Lleras-Muney, 2004. "Booms, Busts, and Babies' Health," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(3), pages 1091-1130.
    2. Emilia Bono & Andrea Weber & Rudolf Winter-Ebmer, 2015. "Fertility and economic instability: the role of unemployment and job displacement," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(2), pages 463-478, April.
    3. Arnaud Chevalier & Olivier Marie, 2017. "Economic Uncertainty, Parental Selection, and Children’s Educational Outcomes," Journal of Political Economy, University of Chicago Press, vol. 125(2), pages 393-430.
    4. Nicola Fuchs-Schündeln & Paolo Masella, 2016. "Long-Lasting Effects of Socialist Education," The Review of Economics and Statistics, MIT Press, vol. 98(3), pages 428-441, July.
    5. Thomas Baudin & David de la Croix & Paula E. Gobbi, 2015. "Fertility and Childlessness in the United States," American Economic Review, American Economic Association, vol. 105(6), pages 1852-1882, June.
    6. Rachel M. Friedberg, 2001. "The Impact of Mass Migration on the Israeli Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(4), pages 1373-1408.
    7. Dan A. Black & Natalia Kolesnikova & Seth G. Sanders & Lowell J. Taylor, 2013. "Are Children “Normal”?," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 21-33, March.
    8. George J. Borjas & Kirk B. Doran, 2021. "The Collapse Of The Soviet Union And The Productivity Of American Mathematicians," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 11, pages 313-373, World Scientific Publishing Co. Pte. Ltd..
    9. Susanne Prantl & Alexandra Spitz-Oener, 2013. "Interacting Product and Labor Market Regulation and the Impact of Immigration on Native Wages," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2013_22, Max Planck Institute for Research on Collective Goods.
    10. Alan B. Krueger & Jorn-Steffen Pischke, 1995. "A Comparative Analysis of East and West German Labor Markets: Before and After Unification," NBER Chapters, in: Differences and Changes in Wage Structures, pages 405-446, National Bureau of Economic Research, Inc.
    11. Dettling, Lisa J. & Kearney, Melissa S., 2014. "House prices and birth rates: The impact of the real estate market on the decision to have a baby," Journal of Public Economics, Elsevier, vol. 110(C), pages 82-100.
    12. repec:pri:cheawb:adriana_booms.pdf is not listed on IDEAS
    13. Sumon Kumar Bhaumik & Jeffrey Nugent, 2011. "Real options and demographic decisions: empirical evidence from East and West Germany," Applied Economics, Taylor & Francis Journals, vol. 43(21), pages 2739-2749.
    14. Gronau, Reuben, 1977. "Leisure, Home Production, and Work-The Theory of the Allocation of Time Revisited," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1099-1123, December.
    15. Stephen J. Redding & Daniel M. Sturm, 2008. "The Costs of Remoteness: Evidence from German Division and Reunification," American Economic Review, American Economic Association, vol. 98(5), pages 1766-1797, December.
    16. Kristiina Huttunen & Jenni Kellokumpu, 2016. "The Effect of Job Displacement on Couples' Fertility Decisions," Journal of Labor Economics, University of Chicago Press, vol. 34(2), pages 403-442.
    17. Joshua R. Goldstein & Michaela Kreyenfeld, 2011. "Has East Germany Overtaken West Germany? Recent Trends in Order‐Specific Fertility," Population and Development Review, The Population Council, Inc., vol. 37(3), pages 453-472, September.
    18. Thomas Baudin & David de la Croix & Paula E. Gobbi, 2015. "Fertility and Childlessness in the United States," American Economic Review, American Economic Association, vol. 105(6), pages 1852-1882, June.
    19. Jennifer Hunt, 2002. "The Transition in East Germany: When Is a Ten-Point Fall in the Gender Wage Gap Bad News?," Journal of Labor Economics, University of Chicago Press, vol. 20(1), pages 148-169, January.
    20. Konrad B. Burchardi & Tarek A. Hassan, 2013. "The Economic Impact of Social Ties: Evidence from German Reunification," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 1219-1271.
    21. Hunt, Jennifer, 1995. "The Effect of Unemployment Compensation on Unemployment Duration in Germany," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 88-120, January.
    22. Debra Friedman & Michael Hechter & Satoshi Kanazawa, 1994. "A theory of the value of children," Demography, Springer;Population Association of America (PAA), vol. 31(3), pages 375-401, August.
    23. Schultz, T Paul, 1985. "Changing World Prices, Women's Wages, and the Fertility Transition: Sweden, 1860-1910," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1126-1154, December.
    24. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    25. David H. Autor & David Dorn, 2013. "The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market," American Economic Review, American Economic Association, vol. 103(5), pages 1553-1597, August.
    26. David Autor & David Dorn & Gordon Hanson, 2019. "When Work Disappears: Manufacturing Decline and the Falling Marriage Market Value of Young Men," American Economic Review: Insights, American Economic Association, vol. 1(2), pages 161-178, September.
    27. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    28. Heckman, James J & Walker, James R, 1990. "The Relationship between Wages and Income and the Timing and Spacing of Births: Evidence from Swedish Longitudinal Data," Econometrica, Econometric Society, vol. 58(6), pages 1411-1441, November.
    29. Michaela Kreyenfeld, 2003. "Crisis or Adaptation – Reconsidered: A Comparison of East and West German Fertility Patterns in the First Six Years after the ‘Wende'," European Journal of Population, Springer;European Association for Population Studies, vol. 19(3), pages 303-329, September.
    30. Christina Gathmann & Ines Helm & Uta Schönberg, 2020. "Spillover Effects of Mass Layoffs," Journal of the European Economic Association, European Economic Association, vol. 18(1), pages 427-468.
    31. Daniel Aaronson & Fabian Lange & Bhashkar Mazumder, 2014. "Fertility Transitions along the Extensive and Intensive Margins," American Economic Review, American Economic Association, vol. 104(11), pages 3701-3724, November.
    32. Tomas Frejka, 2008. "Overview Chapter 5: Determinants of family formation and childbearing during the societal transition in Central and Eastern Europe," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 19(7), pages 139-170.
    33. Jason M. Lindo, 2010. "Are Children Really Inferior Goods? Evidence from Displacement-Driven Income Shocks," Journal of Human Resources, University of Wisconsin Press, vol. 45(2).
    34. repec:pri:cheawb:adriana_booms is not listed on IDEAS
    35. Anna Raute, 2017. "Can Financial Incentives Reduce the Baby Gap? Evidence from a Reform in Maternity Leave Benefits," NBER Working Papers 23793, National Bureau of Economic Research, Inc.
    36. Hans-Peter Kohler & Iliana Kohler, 2002. "Fertility Decline in Russia in the Early and Mid 1990s: The Role of Economic Uncertainty and Labour Market Crises," European Journal of Population, Springer;European Association for Population Studies, vol. 18(3), pages 233-262, September.
    37. Mari Rege & Kjetil Telle & Mark Votruba, 2011. "Parental Job Loss and Children's School Performance," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(4), pages 1462-1489.
    38. Bernd Fitzenberger & Ralf A. Wilke, 2010. "Unemployment Durations in West Germany Before and After the Reform of the Unemployment Compensation System during the 1980s," German Economic Review, Verein für Socialpolitik, vol. 11(3), pages 336-366, August.
    39. Freeman, Richard B. & Katz, Lawrence F. (ed.), 1995. "Differences and Changes in Wage Structures," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226261607, January.
    40. Michael Lechner, 2001. "The Empirical Analysis of East German Fertility after Unification: An Update," European Journal of Population, Springer;European Association for Population Studies, vol. 17(1), pages 61-73, March.
    41. Melanie Arntz & Terry Gregory & Florian Lehmer, 2014. "Can Regional Employment Disparities Explain the Allocation of Human Capital Across Space?," Regional Studies, Taylor & Francis Journals, vol. 48(10), pages 1719-1738, October.
    42. Michael F. Lovenheim & Kevin J. Mumford, 2013. "Do Family Wealth Shocks Affect Fertility Choices? Evidence from the Housing Market," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 464-475, May.
    43. Bernd Fitzenberger & Aderonke Osikominu & Robert Völter, 2006. "Imputation Rules to Improve the Education Variable in the IAB Employment Subsample," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 126(3), pages 405-436.
    44. Christian Dustmann & Bernd Fitzenberger & Uta Sch?nberg & Alexandra Spitz-Oener, 2014. "From Sick Man of Europe to Economic Superstar: Germany's Resurgent Economy," Journal of Economic Perspectives, American Economic Association, vol. 28(1), pages 167-188, Winter.
    45. Jessamyn Schaller, 2016. "Booms, Busts, and Fertility: Testing the Becker Model Using Gender-Specific Labor Demand," Journal of Human Resources, University of Wisconsin Press, vol. 51(1), pages 1-29.
    46. Jennifer Hunt, 2006. "Staunching Emigration from East Germany: Age and the Determinants of Migration," Journal of the European Economic Association, MIT Press, vol. 4(5), pages 1014-1037, September.
    47. Alicia Adsera, 2011. "Where Are the Babies? Labor Market Conditions and Fertility in Europe [Où sont les bébés ? Conditions du marché du travail et fécondité en Europe]," European Journal of Population, Springer;European Association for Population Studies, vol. 27(1), pages 1-32, February.
    48. Tomáš Sobotka & Vegard Skirbekk & Dimiter Philipov, 2011. "Economic Recession and Fertility in the Developed World," Population and Development Review, The Population Council, Inc., vol. 37(2), pages 267-306, June.
    49. Michael C. Burda & Jennifer Hunt, 2001. "From Reunification to Economic Integration: Productivity and the Labor Market in Eastern Germany," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(2), pages 1-92.
    50. Alexandra Fedorets, 2011. "Changes in Occupational Demand Structure and their Impact on Individual Wages," SFB 649 Discussion Papers SFB649DP2011-075, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    51. Arntz, Melanie & Gathmann, Christina, 2014. "Permanent Changes in the Wage Structure and the East German Fertility Crisis," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100464, Verein für Socialpolitik / German Economic Association.
    52. Daniela Hochfellner & Dana Müller & Anja Wurdack, 2012. "Biographical Data of Social Insurance Agencies in Germany – Improving the Content of Administrative Data," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 132(3), pages 443-451.
    53. Alicia Adsera, 2005. "Vanishing Children: From High Unemployment to Low Fertility in Developed Countries," American Economic Review, American Economic Association, vol. 95(2), pages 189-193, May.
    54. Dorn, David & Autor, David & Hanson, Gordon, 2017. "When Work Disappears: Manufacturing Decline and the Falling Marriage-Market Value of Men," CEPR Discussion Papers 11878, C.E.P.R. Discussion Papers.
    55. Sara Rica & Amaia Iza, 2005. "Career Planning in Spain: Do Fixed-term Contracts Delay Marriage and Parenthood?," Review of Economics of the Household, Springer, vol. 3(1), pages 49-73, November.
    56. Diane J. Macunovich, 1995. "The Butz-Ward Fertility Model in the Light of More Recent Data," Journal of Human Resources, University of Wisconsin Press, vol. 30(2), pages 229-255.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Emmler, Julian & Fitzenberger, Bernd, 2021. "Temporary Overpessimism: Job Loss Expectations Following a Large Negative Employment Shock," IZA Discussion Papers 14149, Institute of Labor Economics (IZA).
    2. Julian Emmler & Bernd Fitzenberger, 2022. "Temporary overpessimism: Job loss expectations following a large negative employment shock," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 30(3), pages 621-661, July.
    3. Emmler, Julian & Fitzenberger, Bernd, 2020. "The role of unemployment and job change when estimating the returns to migration," IAB-Discussion Paper 202037, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Emmler, Julian & Fitzenberger, Bernd, 2021. "Temporary overpessimism: Job loss expectations following a large negative employment shock," IAB-Discussion Paper 202105, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Lange, Martin, 2021. "The legacy of state socialism on attitudes toward immigration," Journal of Comparative Economics, Elsevier, vol. 49(3), pages 733-750.
    6. Emmler, Julian & Fitzenberger, Bernd, 2020. "The Role of Unemployment and Job Change When Estimating the Returns to Migration," IZA Discussion Papers 13740, Institute of Labor Economics (IZA).
    7. Andreea Alexandra Piriu, 2022. "Globalization and Gender‐Specific Patterns in Individual Fertility Decisions," Population and Development Review, The Population Council, Inc., vol. 48(1), pages 129-160, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wolfgang Auer, 2018. "Empirical Essays on the Socioeconomic Consequences of Economic Uncertainty," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 79.
    2. Kristiina Huttunen & Jenni Kellokumpu, 2016. "The Effect of Job Displacement on Couples' Fertility Decisions," Journal of Labor Economics, University of Chicago Press, vol. 34(2), pages 403-442.
    3. Bhalotra, Sonia R. & Clarke, Damian & Walther, Selma, 2022. "Women's Careers and Family Formation," IZA Discussion Papers 15639, Institute of Labor Economics (IZA).
    4. Brehm, Margaret E. & Brehm, Paul A., 2022. "Drill, baby, drill: Natural resource shocks and fertility in Indonesia," Labour Economics, Elsevier, vol. 76(C).
    5. Arntz, Melanie & Gathmann, Christina, 2014. "Permanent Changes in the Wage Structure and the East German Fertility Crisis," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100464, Verein für Socialpolitik / German Economic Association.
    6. Daysal, N. Meltem & Lovenheim, Michael & Siersbæk, Nikolaj & Wasser, David N., 2021. "Home prices, fertility, and early-life health outcomes," Journal of Public Economics, Elsevier, vol. 198(C).
    7. Nkechi S. Owoo & Monica P. Lambon-Quayefio, 2022. "Does Job Security Affect Fertility and Fertility Intentions in Ghana? Examining the Evidence," Journal of Family and Economic Issues, Springer, vol. 43(1), pages 86-99, March.
    8. Andersen, Signe Hald & Özcan, Berkay, 2021. "The effects of unemployment on fertility," LSE Research Online Documents on Economics 109007, London School of Economics and Political Science, LSE Library.
    9. Chevalier, Arnaud & Marie, Olivier, 2024. "Risky moms, risky kids? fertility and crime after the fall of the wall," Journal of Public Economics, Elsevier, vol. 230(C).
    10. Baumgarten, Daniel & Irlacher, Michael & Koch, Michael, 2020. "Offshoring and non-monotonic employment effects across industries in general equilibrium," European Economic Review, Elsevier, vol. 130(C).
    11. Emilia Bono & Andrea Weber & Rudolf Winter-Ebmer, 2015. "Fertility and economic instability: the role of unemployment and job displacement," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(2), pages 463-478, April.
    12. Osea Giuntella & Lorenzo Rotunno & Luca Stella, 2021. "Trade Shocks, Fertility, and Marital Behavior," SOEPpapers on Multidisciplinary Panel Data Research 1126, DIW Berlin, The German Socio-Economic Panel (SOEP).
    13. Nieto, Adrián, 2022. "Can subsidies to permanent employment change fertility decisions?," Labour Economics, Elsevier, vol. 78(C).
    14. Marcus Klemm, 2012. "Job Security and Fertility: Evidence from German Reunification," Ruhr Economic Papers 0379, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    15. Jason M. Lindo & Krishna Regmi & Isaac Swensen, 2020. "Stable Income, Stable Family," NBER Working Papers 27753, National Bureau of Economic Research, Inc.
    16. Riukula, Krista, 2024. "Childhood Shocks and Fertility: Evidence from Parental Job Loss," ETLA Working Papers 112, The Research Institute of the Finnish Economy.
    17. Maria De Paola & Roberto Nisticò & Vincenzo Scoppa, 2020. "Fertility Decisions And Employment Protection: The Unintended Consequences Of The Italian Jobs Act," Working Papers 202003, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    18. Maria De Paola & Roberto Nisticò & Vincenzo Scoppa, 2021. "Academic Careers and Fertility Decisions," CSEF Working Papers 595, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    19. Brüll, Eduard & Gathmann, Christina, 2020. "Evolution of the East German wage structure," ZEW Discussion Papers 20-081, ZEW - Leibniz Centre for European Economic Research.
    20. Osea Giuntella & Lorenzo Rotunno & Luca Stella, 2022. "Globalization, Fertility and Marital Behavior in a Lowest-Low Fertility Setting," CESifo Working Paper Series 9755, CESifo.

    More about this item

    Keywords

    fertility; labor demand shock; industrial restructuring; east germany;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rco:dpaper:69. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Viviana Lalli (email available below). General contact details of provider: https://rationality-and-competition.de .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.