The social impact of labour market flexibilization and its fertility consequences in Italy

Abstract

Very low fertility in Italy is a social problem as it is largely involuntary and represents a threat to the continuity of the society and to welfare state accounts. Rising economic uncertainty is considered in the literature as one of the driving forces behind the postponement of childbearing and the reduction in fertility rates in contemporary Europe. Understanding whether employment instability causally and negatively impacts fertility decisions is of fundamental importance to providing clear recommendations to policymakers. To the best of our knowledge, the only study applying a counterfactual approach to the impact of temporary employment on parenthood is an article by Vignoli et al. [11]. The present study replicates such a paper utilizing more recent data for Italy (2016, instead of 2009), thus covering a period encompassing the Great Recession. We adopt the potential outcome approach to causal inference so as to quantify the net effect of having a first job with a temporary vs. permanent contract on the propensity to first-child conception. Our findings confirm a clear-cut causal effect of temporary employment on first-birth postponement. Largely overlapping previous results, we demonstrate how precarious work has become a structural factor discouraging the transition to parenthood among young Italians.