The Impact of the Great Recession on Fertility in Europe

1. The Impact of the Great Recession on Fertility in Europe Anna Matysiak1 – Tomáš Sobotka1– Daniele Vignoli2 1Wittgenstein Centre (IIASA, VID/ÖAW, WU), Vienna Institute of Demography/Austrian Academy of Sciences 2University of Florence, DiSIA – Department of Statistics, Informatics, Applications

2. Background • The global economic recession hit manyEuropean countries for most of the period of 2008-2013 • Past research: economic recessions frequently lead toanincrease in the proportion of youngadultsliving with theirparents, postponement of marriage and fertility(Sobotka et al. 2011, Cherlin et al 2013). • Fertility declineafter 2008 pronounced in countries and regions that experienced stronger economic downturns and faster increases in unemployment (Lanzieri 2013).

3. Changes in TFR in 2000-13, main European regions & the US Beginning of Great Recession Source: Own computations based on Eurostat 2013 & national statistical offices

4. Birth timing: accelerated postponement? Relative changes in age-specific fertility rates five years before (2003-8) and five years into the recession (2008-13) Source: Own computations based on Eurostat 2013 & national statistical offices

5. Why and how is the recent recession likely to have affected fertility? • Massive unemployment in some countries • Rise in the share of NEETS & workless households • Falling incomes, rise in negative equity on housing (mortgages “under water”), foreclosures (US) • Strongly affects young adults, further exacerbates the previous trend of their rising economic and employment uncertainty • Delayed home leaving, econ. independence (Aassve et al. 2012) • Massive cuts in government budgets, also for family support (double-dip effect on fertility?) • Prolonged duration of the recession; loss of hope in the future (Southern Europe) Source: OECD 2014: Society at a Glance 2014. The crisis and its aftermath

6. Past research • The effect of unemployment is unclear and depends on whether unemployment is measured at individual level or aggregate level • Aggregate level unemployment usually depresses fertility (Simó Noguera et al. 2005, Berkowitz King 2005, Aaberge et al. 2005: 150, Adsera 2005, 2011, Neels et al. 2012, Currie and Schwandt 2014), theresults for individual unemployment are conflicting • The effects are sex- and age-specific and differentiated by social status / education (Kreyenfeld 2009, Pailhe and Solaz 2012, Neels et al. 2012, Currie and Schwandt 2014) • Other aggregate-level factors found important in some studies: GDP change, consumer confidence, housing foreclosure rate, self-employment rate, fixed-term contracts

7. Limits of previous research • Only few studies on the effects of the recent recession on fertility in Europe (Goldstein et al. 2011, overview by Eurostat / Lanzieri 2013) • Lack of suitable (panel) data for sound multi-country studies • Little or no use of regional data • US: wider range of suitable surveys & research underway to study wide-ranging effect of the Great Recession on families (e.g., Guzzo 2012, Cherlin et al. 2013, Currie and Schwandt 2015)

8. Aims, data, methods

9. Goals Initial aim: Studying the impact of age, parity, education and aggregate-level conditions on first and second births NUTS-2 regions; EU-SILC • Data problems, especially in the recession period (2011)

10. Goals Initial aim: Studying the impact of age, parity, education and aggregate-level conditions on first and second births NUTS-2 regions; EU-SILC • Data problems, especially in the recession period (2011) Revised aim: Using “macro” data in 2000-13 for NUTS-2 regions to study the impact of aggregate-level employment conditions on fertility change • Main contribution: using recent data covering extended period of the recession, using regions as a main unit • Main drawback: losing individual-level dimension.

11. Data • Coverage: 2000-13: EU, Switzerland, Norway; 286 NUTS-2 units • Fertility: • Age-specific fertility rates, cumulated into age groups (15-19, 20-24, 25-29, 30-34, 35-49) • Total Fertility Rates • Almost complete coverage, high precision, based on vital statistics • Employment conditions: • unemployment rates (ages 15-24, 25-64, 20-64), • long-term unemployment (% of unemployed), • % self-employed, GDP per capita(in PPP) • % NEETs (not in education, employment, nor training) • Missing for some regions & periods (small sample or not collected), some fluctuations, based on Labour Force Surveys • Other variables considered: indicators on poverty, social exclusion (based on EU-SILC, high % missing, unstable)

12. Hierarchical structure of data 3° level: H Countries Country 1 Country 2 Country 3 Country J 2° level: J Regions Region 1 Region 2 Region 3 Region J … 1° level: Years (2000-2013) … Year 2000 Year 2001 Year 2002 Year 2013

13. Method • Three-level growth-curve model with regional age-specific fertility rates as dependent variables • allows to model the trend in the regional age-specific fertility rates in a flexiblemanner • the effects of the recession indicators are decomposed into the within-region, between-region within-country and between-country effects • allows to introducehigherlevelcovariates

14. Method Three-level growth-curve model with regional age-specific fertility rates as dependent variables Random slope at regional and country level Random intercept at regional and country level

15. Method Three-level growth-curve model with regional age-specific fertility rates as dependent variables Random slope at regional and country level Random intercept at regional and country level within region variation between-region within-country variation between country variation

16. Method Between-region Within-country effect Within-region effect Between-country effect • We are mainly interested in the within-region effects • Several model specifications were prepared, we also interacted the within-region effects with macro-regions and a recession dummy

17. Main results

18. Explanatory power of the recession covariates Proportion of the variance in fertility rates explained by:

19. All countries & regions combined How a 10 pp. annual increase in • unemployment rate • the share of long-term unemployed • in the % self-employed • in the % NEETs and a 10 ppannualdecreasein the GDP per capita predicted to change fertility rates?

20. All countries & regions combined Effects on TFREffects on age-specific fertility Absolute change in TFR / ASFR Insignificant results (p>0.1) are transparent

21. Within-region vs between region effects Within-region effects Between-region effects Absolute change in TFR / ASFR

22. Effects prior and during the recession Absolute change in TFR/ ASFR Absolute change in TFR / ASFR

23. Country groups: effects on TFR Unemployment: Anglo-Saxon German-speaking CEE LT-unemployment: All besides Southern Europe Self-employment: Southern Europe NEETs Southern Europe GDP: German-speaking Southern Europe CEE Effects of 10pp increase on TFR Insignificant results (p>0.1) are transparent

24. Country groups: effects on age-specific fertility Southern Europe CEE Anglo-Saxon German - speaking

25. Country groups: effects on age-specific fertility Nordic France + Benelux

26. Conclusions • Our recession indicators explain around 40-60% variation in fertility rates (apart from the model for fertility at ages 25-29) • Regions with higher unemployment and self-employment and lower gdp per capita have lower fertility, but high levels of NEETs are clearly related to higher fertility • Increase in unemployment or self-employment (and NEETs in Southern Europe) and decline in the GDP lower fertility • The effects get more intensive after 2008 (recession) • The role of uncertainty indicators varies by age: unemployment is more important at younger ages (15-24) and self-employment at higher ages (20-29)

27. Conclusions • The role of uncertainty indicators varies also by European macro-regions • Effects of self-employment and NEETs are more important in Southern Europe • Effects of unemployment are very strong in CEE but also in German-speaking countries • Relatively universal effects of long-term unemployment and GDP • Effects in general weaker and less often significant in countries which were not hit by the recession (France + Benelux or Nordic countries)

28. A. Matysiak and T. Sobotka’s research was funded by the European Research Council under the European Union’s Seventh Framework Programme (FP7/2007-2013) / ERC Grant agreement n° 284238 (EURREP). EURREP website: www.eurrep.org