Family policies, childbearing, and economic crisis: The case of Iceland

Abstract

BACKGROUND In the early 2000s, Iceland implemented one of the most gender-equal parental leave systems in the world, and at the same time increased the volume of public childcare. A few years later, in 2008, Iceland experienced a major economic crises that, among other things, lead to cutbacks in governmental spending and decreased support to families with children. OBJECTIVE The objective of this study is to provide insight into recent childbearing dynamics in Iceland and how they may be linked to recent social-policy reforms and the intervention of the economic crisis in 2008. METHODS We use official individual longitudinal register data covering the total female population born in Iceland between 1953 and 1997. We analyse the data by means of event history techniques. RESULTS We find that changes in the standardized birth rates coincide with the emergence of the reformed family-policy package: A declining trend in the age-standardized first-birth rate came to a halt, and the propensity to have a second and a third child increased. After the onset of the crisis, a trend of decreasing first-birth intensities reemerged and, in 2011, a turnaround to declining second- and third-birth rates. CONCLUSIONS The development in the post-2008 period indicates that even in the most gender-equal settings, the gender balance in family care is still vulnerable, and that family policies cannot compensate in full for the impact of economic crisis on fertility. CONTRIBUTION The study highlights the interdependency of factors related to both social policy and the business cycle in relation to childbearing developments.