Economic uncertainty and family dynamics in Europe: Introduction

Background Economic uncertainty has become an increasingly important factor in explanations of declining fertility and postponed family formation across Europe. Yet the micro-level evidence on this topic is still limited. Objective This special collection of Demographic Research focuses on the issue of how economic and employment uncertainties relate to fertility and family dynamics in Europe. Methods The collection is comprised of studies that explore how various dimensions of employment uncertainty, such as temporary working contracts and individual and aggregate unemployment, are related to the fertility and family formation of women and men across Europe. The studies cover Germany, the UK, France, Russia, Estonia, Sweden, Italy, Spain, and Israel. Results The various micro-level studies that are assembled in this special collection do not provide a simple answer to the question of whether and how economic uncertainty suppresses (or stimulates) fertility. However, some systematic variation by welfare state regime is discernable. Conclusions Given the recent economic volatility in Europe, we expect that labor market uncertainties will remain an important component of explanations of fertility developments in the 21st century. 1 Max Planck Institute for Demographic Research (MPIDR). E-mail: [email protected]. 2 Stockholm University Demography Unit (SUDA). 3 Institut national d'études démographiques (INED). Kreyenfeld, Andersson & Pailhé: Economic uncertainty and family dynamics in Europe: Introduction 836 http://www.demographic-research.org Contributions to the Special Collection on Economic Uncertainty and Family Dynamics in Europe 1. Berkay Özcan, Karl Ulrich Mayer and Joerg Luedicke (Germany), The Impact of Unemployment on the Transition to Parenthood 2. Ina Berninger, Bernd Weiß and Michael Wagner (Germany), On the Links Between Employment, Partnership Quality, and the Intention to Have a First Child: The Case of West Germany 3. Christian Schmitt (Germany and the U.K.), Labour Market Integration, Occupational Uncertainties, and Fertility Choices in Germany and the UK 4. Ariane Pailhé and Anne Solaz (France), The Influence of Employment Uncertainty on Childbearing in France: A Tempo or Quantum Effect? 5. Sunnee Billingsley (Russia), Economic Crisis and Recovery: Changes in Second Birth Rates within Occupational Classes and Educational Groups 6. Martin Klesment and Allan Puur (Estonia), Effects of Education on Second Births Before and After Societal Transition: Evidence from the Estonian GGS 7. Karin E. Lundström and Gunnar Andersson (Sweden), Labor-market Status, Migrant Status and First Childbearing in Sweden 8. Elisabetta Santarelli (Italy), Economic Resources and the First Child in Italy: A Focus on Income and Job Stability 9. Daniele Vignoli, Sven Drefahl and Gustavo De Santis (Italy), Whose Job Instability Affects the Likelihood of Becoming a Parent in Italy? A Tale of Two Partners 10. Concetta Rondinelli, Arnstein Aassve, Francesco C. Billari (Italy), Women‘s Wages and Childbearing Decisions: Evidence from Italy 11. Alicia Adsera (Europe and Spain), The Interplay of Employment Uncertainty and Education in Explaining Second Births in Europe 12. Liat Raz-Yurovich (Israel), Men‘s and Women‘s Economic Activity and First Marriage: Jews in Israel, 1987-1995 Demographic Research: Volume 27, Article 28 http://www.demographic-research.org 837 1. Background During the 1990s, economic uncertainty became an increasingly important factor in explanations of the decline in fertility and the postponement of family formation across Europe, particularly when the goal was to explain the developments observed in Southern and post-socialist Central and Eastern Europe (e.g., Kharkova and Andreev 2000; Bhaumik and Nugent 2002; Kohler and Kohler 2002; Sobotka 2003). The onset of the economic recession in 2008 sparked renewed interest in the role of economic uncertainty for family dynamics. In light of the subsequent financial and economic volatility across Europe, the relationship between economic conditions and family dynamics has become a major topic of public interest. In early 2009, we identified a need for further micro-level evidence on how insecure economic conditions affect fertility decisions and family dynamics in contemporary Europe. Except for research on Eastern Europe, there was still relatively little empirical research based on micro-level data that addressed these issues. To help close this gap, we organized a workshop on Economic Uncertainty and Family Dynamics, which was held in Berlin in July 2009 at the Wissenschaftszentrum Berlin für Sozialforschung / Social Science Research Center Berlin. The workshop was jointly organized by the Max Planck Institute for Demographic Research (MPIDR), the Stockholm University Linnaeus Center on Social Policy and Family Dynamics in Europe (SPaDE), and the French National Institute for Demographic Studies (INED). The contributions in this special collection of Demographic Research are based on papers presented at the workshop. In this collection of articles, we bring together a range of new micro-level evidence on a topic that will remain high on the agenda of researchers and policy makers for many years to come. 2. Historical perspectives on economic conditions and family dynamics The relationship between economic conditions and fertility has been a longstanding topic of interest in demography and demographic research. As far back as 1798, Malthus addressed this issue in his ―Essay on Population,‖ in which he claimed that food supply and population growth were closely interrelated. Although Malthus believed that the chief mechanisms that balanced food supply and population growth were starvation, death, and poverty, he also argued that economic hardship might induce people to delay marriage and childbearing. The idea that people need an adequate economic basis to start a family has also shaped social institutions. In many areas of Western Europe during the 18 th and 19 th centuries, landless and unskilled Kreyenfeld, Andersson & Pailhé: Economic uncertainty and family dynamics in Europe: Introduction 838 http://www.demographic-research.org laborers did not have the option to marry, because they were deemed unable to support a family. This contributed to the ―Western European marriage pattern,‖ in which large proportions of the population never married at all. Under this regime, “it [was] necessary for a man to defer marriage until he could establish an independent livelihood to support a family” (Hajnal 1965: 133). When childbearing occurred mainly within marriage, such regulations were efficient in limiting fertility to those who were able to support a family. For historical demographers, economic hardship has remained a decisive factor in explanations for postponed or foregone marriage formation and reduced fertility (see, e.g., Bengtsson and Saito 2000). The assumption that having a secure economic position is the main prerequisite for having children was, however, severely challenged by the demographic developments that are collectively referred to as Europe‘s demographic transition. During this transition, industrialization and economic growth were accompanied by rapid declines in fertility. This trend gave rise to a situation in which high income and great wealth were associated with low, rather than high, fertility. The observation that wealthier individuals tended to limit their fertility to a greater extent than others called for new theoretical approaches. Some early researchers speculated that having children may have an inverse effect on social mobility (Brentano 1909: 588; Mombert 1912: 816ff.; Mackenroth 1953: 397ff.). Leibenstein (1975) and Easterlin (1976) drew on social differences in aspirations and the concept of ―relative income‖ to explain variations in fertility. Becker (1960) argued that parents not only choose the number of children (child quantity), but also the time and money they invest in each child (child quality). Becker (1993) assumed that, as income levels rise, the demand for child quality tends to increase to a much greater extent than the demand for child quantity, which together result in a negative relationship between (individual and aggregate) income and fertility. The ―quality-quantity trade-off‖ model has become a cornerstone of family economics. However, because it focuses exclusively on income, the scope of the concept is too limited to explain how economic uncertainty relates to fertility. 3. Economic uncertainty and fertility during the 20th century Economic uncertainty may be understood as an individual risk factor, related to phases in the life course that are characterized by unemployment, part-time work, working on a term-limited contract, or difficulties entering the labor market in the first place (e.g., Mills and Blossfeld 2003; Blossfeld et al. 2005; Blossfeld et al. 2006; Blossfeld and Hofmeister 2006). It may also be conceptualized as an aggregate phenomenon, reflecting general uncertainties felt by all people during, for example, an economic recession (Sobotka et al. 2011). Demographic Research: Volume 27, Article 28 http://www.demographic-research.org 839 An inspection of time series of crude total fertility rates and selected macroeconomic indicators for various countries in Europe during the 20th century gives no immediate indication of strong correlations between aggregate economic conditions and fertility. Figure 1 shows how the total fertility rates during 1900-2010 for three European countries, France, Germany, and Sweden, were affected by events such as the onset of the Great Depression, the oil price shock of the early 1970s, and, in the case of Sweden, the financial crisis of the early 1990s. Except for the latter event, which was specific to Sweden (cf. Andersson 2000), it is hard to detect any clear-cut impact of these economic crises on aggregate fertility trends 4 . While it is widely accepted among demographers that the Great Depression led to reduced fertility, the relationship between the downturn and the time series of period total fertility is not very clear (Figure 1). It has been shown that the Great Depression explains the relatively high levels of childlessness and late ages at first birth for the cohorts born around 1900 (e.g., Ryder 1980). The fertility responses to the Great Depression suggest that there is no uniform impact of macroeconomic conditions on fertility: economic uncertainties may have had different effects at different stages of the life course. Women and men aged 30 and above who were childless during the Great Depression might have had to forgo childbearing in some cases, while younger people had the option of postponing their fertility plans until circumstances improved (Kiser and Whelpton 1953). The relationship between the fertility changes of the 1970s and another big economic downturn, which started with the oil price shock at the beginning of the decade, has attracted relatively little attention from demographers. Fertility developments during this period are more often ascribed to factors other than the macroeconomic conditions. In particular, the Second Demographic Transition theory attributes the fertility declines in Europe during the 1970s and adjacent decades to changes in values such as individualization, self-actualization, individual freedom, and women‘s emancipation (Lesthaeghe 1983, 2010). Van Bavel (2010) has pointed out that even the demographic literature of the 1920s and 1930s tended to place much greater emphasis on the role of changes in values than on the impact of macroeconomic circumstances in explaining the ongoing fertility declines of those decades. 4 The more general economic recession of the early 1990s also appeared to have had a moderate impact on fertility trends in France: in 1993, the total fertility of France reached its lowest level since the Second World War (1.66). Kreyenfeld, Andersson & Pailhé: Economic uncertainty and family dynamics in Europe: Introduction 840 http://www.demographic-research.org Figure 1: Total Fertility in France, Germany, and Sweden, 1900-2010