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The Great Recession and Fertility in Europe: a Sub-National Analysis, Vienna Institute of Demography Working Papers, No A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Matysiak, Anna; Vignoli, Daniele; Sobotka, Tomáš Working Paper The Great Recession and fertility in Europe: A sub- national analysis Vienna Institute of Demography Working Papers, No. 02/2018 Provided in Cooperation with: Vienna Institute of Demography (VID), Austrian Academy of Sciences Suggested Citation: Matysiak, Anna; Vignoli, Daniele; Sobotka, Tomáš (2018) : The Great Recession and fertility in Europe: A sub-national analysis, Vienna Institute of Demography Working Papers, No. 02/2018, Austrian Academy of Sciences (ÖAW), Vienna Institute of Demography (VID), Vienna This Version is available at: http://hdl.handle.net/10419/184849 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu WWW.OEAW.AC.AT VIENNA INSTITUTE OF DEMOGRAPHY WORKING PAPERS 02/2018 THE GREAT RECESSION AND FERTILITY IN EUROPE: A SUB-NATIONAL ANALYSIS ANNA MATYSIAK, TOMÁŠ SOBOTKA AND DANIELE VIGNOLI Vienna Institute of Demography Austrian Academy of Sciences Welthandelsplatz 2, Level 2 | 1020 Wien, Österreich [email protected] | www.oeaw.ac.at/vid DEMOGRAPHY OF INSTITUTE VIENNA – VID Abstract This study investigates how the changes in labour market conditions and economic growth affected fertility before and during the recent economic recession in Europe. To this end, we use data for 258 European regions in 28 European Union (EU) member states and Iceland. We apply three-level growth-curve models which allow for a great deal of flexibility in modelling temporal change and handling hierarchically structured data. Our findings show that fertility decline was strongly related to unemployment increase and that this relationship was significant at all ages. Fertility responded to worsening economic conditions especially in Southern Europe and in Central and Eastern Europe, i.e. two broad regions which were considerably affected by the recession and where welfare policies provided lowest support against poverty and unemployment. Keywords Fertility, economic uncertainty, economic recession, Europe, regional differences, unemployment. Authors Anna Matysiak (corresponding author), Wittgenstein Centre for Demography and Global Human Capital (IIASA, VID/ÖAW, WU), Vienna Institute of Demography/Austrian Academy of Sciences. Email: [email protected] Tomáš Sobotka, Wittgenstein Centre for Demography and Global Human Capital (IIASA, VID/ÖAW, WU), Vienna Institute of Demography/Austrian Academy of Sciences. Email: [email protected] Daniele Vignoli, University of Florence. Email: [email protected] Acknowledgements Research by A. Matysiak and T. Sobotka was funded by the European Research Council under the European Union’s Seventh Framework Programme (FP7/2007-2013) / ERC Grant agreement n° 284238 (EURREP project). Research by Daniele Vignoli received funding from the European Research Council under the European Union’s Horizon 2020 research and innovation programme / ERC Grant agreement n° 725961 (EU-FER project). We also thank Leonardo Grilli for his comments and suggestions on our models. The Great Recession and Fertility in Europe: A Sub-National Analysis Anna Matysiak, Tomáš Sobotka, Daniele Vignoli 1. Introduction The global Great Recession that started in autumn 2007 in the United States hit eventually almost all European countries, with many experiencing plummeting Gross Domestic Product (GDP) and rising unemployment for most of the 2008-2013 period. The recession has destroyed many jobs, put a downward pressure on wages and induced a huge strain on government budgets, often resulting in cuts to spendings on social policies and families (OECD 2014). Previous economic recessions frequently led to fertility declines and stimulated fertility postponement (Sobotka et al. 2011, Cherlin et al 2013). Especially rising unemployment rates were associated with fertility declines that often took place with a time lag of one to two years (Simó Noguera et al. 2005, Berkowitz King 2005, Aaberge et al. 2005: 150, Adserà 2005, 2011, Neels et al. 2013). Most of the evidence on fertility changes in Europe after 2008 is in line with the past findings (Sobotka et al. 2011; Goldstein et al. 2013; Lanzieri 2013; Sobotka 2013; Comolli 2017). The increase in the period total fertility rates (TFR) that started around the turn of the century has peaked in 2008-10; thereafter fertility rates declined or levelled off in most European countries, especially among young women below age 25 (Sobotka et al. 2011; Goldstein et al. 2013; Lanzieri 2013; Sobotka 2013; Sobotka et al. 2015). Altogether, 16 countries experienced a TFR decline by 0.1 child or more between the year the TFR peaked in 2008-11 and 2013. The fertility decline has been more pronounced in countries and regions that experienced stronger economic downturns and faster increases in unemployment, especially in Southern Europe (Lanzieri 2013). Most studies on the consequences of the last economic recession on fertility in Europe have been descriptive (Lanzieri 2013) or confined to single countries (e.g. Pailhé and Régnier-Loilier 2015; Cazzola et al. 2016; Dommermuth and Lappegård 2016; Kotzamanis et al. 2017). Few studies adopted a broader comparative perspective, but remained limited to country-level data. Bellido and Marcén (2016) investigated changes in total fertility in response to an increase in unemployment using a pooled sample of 30 European countries over the period 1991 to 2013. Goldstein et al. (2013) looked, in addition, at changes in age- specific fertility rates by birth order, but covered only the first stage of the economic recession until 2010. Comolli (2017) extended the study by Goldstein et al (2013) using longer time series and a wider selection of economic indicators. These studies demonstrated that an increase in unemployment during the economic recession was associated with declining fertility rates in Europe, especially at younger ages. In addition, 2 Comolli (2017) showed that fertility responded negatively to changes in consumer confidence and Testa and Basten (2014) reported an increase in the proportion of individuals who were uncertain about realising their lifetime fertility intentions during the recession. However, the impact of other relevant labour market developments (such as increase in unemployment persistence or social disengagement of the youth) on fertility in Europe has not yet been investigated. Compared to Europe, changes in fertility expectations, intentions and in actual fertility, childlessness as well as in marriage and divorce have been analysed in the United States on a much greater scale using a wide array of indicators of economic uncertainty (e.g., Schneider 2015 and 2017; Currie and Schwandt 2014; Comolli and Bernardi 2015; Cohen 2014; Schneider and Hastings 2015; Cherlin et al. 2013). Our study aims to expand the understanding of the links between deteriorating economic conditions and fertility rates during the recent recession in Europe. We are particularly interested in exploring how the dynamics of changes in economic uncertainty impacted total fertility and its age profile and whether this impact differed by broader welfare state groupings. We analyse changes in the TFR and in age-specific fertility rates (ASFRs) for major age groups over the period 2001-2013 (with fertility data studied up to 2014) in 28 EU member states and Iceland. We extend the previous cross-European research on the topic in several ways. First, instead of performing the analysis at the country level we make use of the information for 258 subnational units (NUTS-2 regions). Such approach allows us to better capture changes in local employment and economic conditions than the country-level analysis (Bruno et al. 2016). In addition, subnational regions are more comparable in terms of population size than European countries and are often used for monitoring and assessing social cohesion and application of regional policies. Second, we expand the comparative European research on the topic by using a wider array of economic and labour market indicators than the previous studies. Even though we were heavily restricted by the availability of economic indicators at the subnational level we used two other labour market indicators which may signal economic uncertainty during economic downturn —the share of long-term unemployed and the share of self-employed — besides the commonly used total and youth unemployment rate. We also included the indicator
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