The impact of unemployment on the transition to parenthood

This paper seeks to advance our understanding about the impact of unemployment on fertility. From a theoretical perspective, both negative and positive effects might be expected. Existing empirical studies have produced contradictory results, partly because of varying institutional contexts, the use of different measures, and left-censoring problems. We address these theoretical and methodological problems in the extant literature. Our data comes from the German Life History Study (GLHS) and, in particular, the data on the 1971 cohort, which was collected in two representative and retrospective surveys conducted in East and West Germany in 1996-1998 and 2005. Using monthly information, we perform event history analysis to identify the timing of fertility for both men and women conditional on a number of covariates. We present our results as a comparison between East and West Germany, as the institutional contexts, the labour markets, and the value systems differ considerably between the two parts of the German state.