Does exposure to high unemployment rates during youth influence subsequent family formation decisions? Exploiting variation in economic conditions across individuals born in different regions and time periods, we draw upon life-history data from Understanding Society to shed light on this question. To capture differences in regional exposure to economic conditions across birth cohorts, we link detailed respondent birth location information to a unique dataset constructed from historical digitised records of regional claimant count data. We focus on how the timing of the initial fertility decision responds to negative economic conditions during youth. Importantly, our empirical strategy allows us to observe completed fertility cycles for all women. This allows us to distinguish between permanent and temporal shift in initial fertility across the fertility cycle. On aggregate, we find that an increase in the unemployment rate experienced during youth, accelerates the initial fertility decision, with catch-up occurring by mid-thirties. We further show that earlier exposure (age 16) permanently increases fertility for women from manual social origin backgrounds, whereas later exposure (age 18) simply accelerates the initial fertility decision leaving total fertility unaffected. Youth exposure to high unemployment rates results in a total decline in fertility for women from more advantaged social origin backgrounds, with later exposure accelerating the decline compared to earlier exposure. We conclude that heterogeneous age of exposure fertility effects by social origin backgrounds indicate that mechanisms of initial labour market scarring are occurring.

Co-authors

Dr Xhiselda Demaj, Ca’ Foscari University of Venice, IT