The Heretogenous Effect of Unemployment on Fertility in Sweden

Alessandro Di Nallo , Université de Lausanne
Siddartha Aradhya, Lund University
Ben Wilson, Stockholm University

We analyse the causal effect of unemployment on fertility in Sweden. We follow in the vein of other studies that implemented a causal design to assess the effect of a job loss on fertility behaviour. Using a well-established method, we make the case that (unexpected) « firm closure » represents an exogenous source of unemployment. Thus, we adopt this as an instrument to estimate men’s and women’s fertility responses. We use administrative panel data from Swedish registers which include residents born between 1972 and 1990. The data contain yearly information about employment, relationship status and fertility history as well as some key information on the firms they worked in. We run separate analysis for men and women. Our preliminary results show that unemployment instrumented by firm closure negatively affects men and, to a larger extent, women’s timing of birth in the short run (within two years after experiencing the job loss).

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 Presented in Session 42. Unemployment and Labor Markets