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FERTILITY DECISIONS AND EMPLOYMENT PROTECTION: THE UNINTENDED CONSEQUENCES OF THE ITALIAN JOBS ACT

Maria De Paola (), Roberto Nisticò () and Vincenzo Scoppa ()

No 202003, Working Papers from Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF

Abstract: We study the effect of a reduction in employment protection on fertility decisions. Using data from the Italian Labor Force Survey for the years 2013-2018, we analyze how the propensity to have a child has been affected by the 2015 Labor Market Reform, the so-called “Jobs Act”, which has essentially reduced the employment protection for large-firm employees and leaved largely unchanged that for small-firm ones. We employ a Difference-in-Differences identification strategy and compare the average change over time in fertility decisions of women employed in large firms with the average change experienced by women employed in small firms. We find that women exposed to the reduction in employment protection have a 1.4 percentage point lower probability of having a child than unexposed women. A battery of robustness checks confirms this finding. We document large heterogeneous effects by marital status, parity, geographic areas as well as by the level of education and wage. Our findings help understand the potential unintended consequences that reforms introducing more labor market flexibility have on fertility decisions by increasing insecurity on career prospects.

Keywords: Fertility; Employment Protection Legislation; Labor Market Reform; Difference-inDifferences (search for similar items in EconPapers)
JEL-codes: J13 J65 J41 M51 C31 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2020-03
New Economics Papers: this item is included in nep-lab and nep-ore
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http://www.ecostat.unical.it/RePEc/WorkingPapers/WP03_2020.pdf First version, 2020-03 (application/pdf)

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Working Paper: Fertility Decisions and Employment Protection: The Unintended Consequences of the Italian Jobs Act (2020) Downloads
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