Does Temporary Employment Affect Fertility? New Evidence from the Italian Labour Market Reforms

Luca Pieroni , University of Perugia
Donatella Lanari, University of Perugia
Giorgio d'Agostino, University Rome III

The employment trends over the last decades of most European countries, which introduced more flexible labour market contracts, have raised concerns over the risk for workers to be trapped in temporary employment contracts, with lower wages, inferior bargaining power and less social protection (i.e., economic insecurity). Italy is an interesting case study because, starting from the late 1990s, the labour market reforms increased gradually the flexibility of the labour market by introducing new atypical contracts and by relaxing the restrictions on their use. The effective application of the labour market reform for apprenticeship and fixed-term contracts from the year 2005 exposed women to a higher risk of losing their jobs and, in turn, affected fertility decision, although the magnitude of this effect was influenced by many confounding factors like completing education or buying a house, which is known to postpone and decrease fertility rate. Using the AD-SILC database which merges the dataset “IT-SILC (2005)” provided by the Italian Institute of Statistics with the administrative archives of the Italian Institute of Social Security, we first show that the new labour market regime explains the reduction on the probability to have a child by about 1.4 percentage points, a point estimate lower than the effect to have the first child (-3.8 p.p.). The estimated parameters were enough different using separately the fixed-term sample, while they appear similar for the apprenticeship. These findings are confirmed even when we estimate the fertility decisions using the temporary contracts extended to the couple.

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 Presented in Session P1. Poster Session Fertility, Family and the Life Course