Globalization, Fertility, and Marital Behavior in a Lowest-Low Fertility Setting

Abstract

Declines in marriage and fertility rates in many developed countries have fostered research debate and increasing policy attention. Using longitudinal data from the German Socio-Economic Panel, we analyze the effects of exposure to globalization on fertility and marital behavior in Germany, which was a lowest-low fertility setting until recently. We find that exposure to greater import competition from Eastern Europe led to worse labor market outcomes and lower fertility rates. In contrast, workers in industries that benefited from increased exports had better employment prospects and higher fertility. These effects are driven by low-educated individuals, married men, and full-time workers and reflect changes in the likelihood of having any child (the extensive margin). We find evidence of some fertility postponement and significant effects on completed fertility, but we see little evidence of a significant impact on marital behavior. Our results inform the public debate on fertility rates in settings with lowest-low fertility, such as Germany, during the period under investigation.

Household Responses to Trade Shocks

“…This is different from the US experience: Autor et al (2019) fnd substantial increases in divorce and marriage rates in local labour markets where men were more exposed to the China trade shock. It is however consistent with fndings from other European countries (Giuntella et al, 2022;Keller & Utar, 2022). Our results suggest that the negative pattern of family breakdown and other social impacts following reductions in manufacturing employment (e.g., Che et al (2018) on crime, Pierce & Schott (2020) on 'deaths of despair') need not be inevitable.…”

“…This latter fnding contrasts with Autor et al (2019), who fnd substantial effects of import competition in male-dominated industries on divorce and marriage rates in more exposed local labour markets in the US, and an accompanying increase in premature male mortality. It is however consistent with fndings for other European countries (Keller & Utar, 2022;Giuntella et al, 2022). Our results suggest that the negative implications of family breakdown and other social impacts that studies of the US have identifed following reductions in manu-facturing employment (Che et al, 2018;Pierce & Schott, 2020) are not inevitable, and may depend on other aspects, such as labour market institutions, which differ across countries.…”

“…Our fnding on a reduction in divorce rates among women under 45 who were exposed to import competition is consistent with the 'retreat to family' phenomenon proposed in Keller & Utar (2022), although we do not fnd evidence of the same effects on childbirth they document in their paper. Giuntella et al (2022) also fnd a negative and marginally signifcant effect of import competition on women's divorce rates in Germany.…”

“…Unlike Autor et al (2019), however, they did not fnd effects on marriage and fertility for men affected by the shock. In Germany, Giuntella et al (2022) fnd that exposure to import competition from China and Eastern Europe in the 2000s led to lower fertility, while greater exposure to export opportunities to this region increased it. They also fnd a negative and marginally signifcant effect on divorce for women.…”

“…The UK is an interesting case for investigating the economic adjustment processes to trade shocks, given that it experienced the largest percentage decline in manufacturing employment among OECD countries between 1999 and 2007, at the same time as a large increase in its trade defcit with China (Dorn & Levell, 2021). Previous work has emphasised differences in labour market institutions and fexibility (Balsvik et al, 2015;Keller & Utar, 2022), and differences in trade patterns (Dauth et al, 2021;Giuntella et al, 2022) as potential explanations for the varying impact of Chinese import competition across countries.…”