Globalization and Gender‐Specific Patterns in Individual Fertility Decisions

What is it about?

In the German post-reunification context dominated by economic uncertainty and structural change, this paper studies the effects of import shocks from China on the fertility decisions of individuals working in the German manufacturing sector between 1995 and 2016. While focusing on trade shocks related to Chinese imported goods, the paper explores individual fertility via the labor market outcomes of manufacturing workers, roughly a fifth of German employment. I investigate the gender-specific effects of Chinese import competition on individual fertility and explain the channels mediating each of them. I find that globalization affects overall fertility negatively, but the effect is positive for women and negative for men. Results indicate a reduction in the employment opportunity of individuals, an increase in marginal employment and higher economic insecurity. There is a substitution effect in the labor supply of women, here prevalently concentrated in low-technology sectors: as female earnings fall and their opportunity cost of work is lower, the prospect of having children possibly becomes a more rewarding alternative. Given concerns over low fertility in Germany, findings are particularly important for understanding the German social and economic structure that enabled the country's post-reunification transformation but also allowed heavy labor market segmentation and atypical work.

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Photo by Dainis Graveris on Unsplash

Photo by Dainis Graveris on Unsplash

Why is it important?

The paper sheds light on the social and economic context of low-fertility settings, and why labor market segmentation and non-standard forms of employment cannot help with fertility goals in a globalized world. The decline in economic opportunity across individuals working in import-competing jobs puts both men and women in advanced economies at risk. In a globalized world, social institutions such as the family, work and the economy are incompatible with individuals' goals, which often lack future orientation. Particularly, both men are women have higher risks of having some form of non-standard employment, but women are also trapped in low-paid, low-autonomy atypical work from which they move away due to childbearing. This is neither equitable nor sufficient to counterbalance the overall fertility decline.

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