Globalization and Gender-Specific Patterns in Individual Fertility Decisions

Abstract

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.