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Fertility Decisions and Employment Protection: The Unintended Consequences of the Italian Jobs Act

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Abstract

We study the effect of a reduction in employment protection on fertility decisions. Using data from the Italian Labor Force Survey for the years 2013-2018, we analyze how the propensity to have a child has been affected by the 2015 Labor Market Reform, the so-called “Jobs Act”, which has essentially reduced the employment protection for large-firm employees and leaved largely unchanged that for small-firm ones. We employ a Difference-in-Differences identification strategy and compare the change over time in fertility decisions of women employed in large firms with the change experienced by women employed in small firms. We find that women exposed to the reduction in employment protection have a 1.4 percentage points lower probability of having a child than unexposed women. A battery of robustness checks confirms this finding. We document large heterogeneous effects by age, marital status, parity, geographic areas as well as by the level of education and wage. Our findings help understand the potential unintended consequences that labor market reforms introducing greater flexibility have on fertility decisions by increasing insecurity on career prospects.

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  • Maria De Paola & Roberto Nisticò & Vincenzo Scoppa, 2021. "Fertility Decisions and Employment Protection: The Unintended Consequences of the Italian Jobs Act," CSEF Working Papers 596, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  • Handle: RePEc:sef:csefwp:596
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    1. Maria De Paola & Roberto Nisticò & Vincenzo Scoppa, 2021. "Academic Careers And Fertility Decisions," Working Papers 202101, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.

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    More about this item

    Keywords

    Fertility; Employment Protection Legislation; Labor Market Reform; Difference-in-Differences.;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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