Employment
Effects on East German Fertility After Unification
James C. Witte and Gert G.
Wagner
Abstract
Vital statistics indicate that the fertility rate in East Germany
dropped sharply after German unification; moreover, it has not yet
rebounded but remains stable at a low level. This paper uses data
from the German Socio-Economic Panel (GSOEP) to examine births in
the former German Democratic Republic in 1992 and 1993. The primary
explanatory variables include womenÕs employment status in 1991
and 1992, expectations about future unemployment, and the employment
status of cohabiting or marital partners.
Our hypothesis is that young women who become unemployed are likely
to use this "occasion" to become pregnant. We assume that the preference
for children has not changed dramatically among East German women
following unification. Therefore, we view the decline in fertility
as a change in opportunity costs. In general, there are long-term
opportunity costs associated with an interruption in employment
due to the subsequent devaluation of human capital. Specifically,
in East Germany the reentry rates of unemployed people into the
labor market are very low. As a result: 1) the opportunity costs
of having a child are quite high for employed women since they are
likely to experience difficulties reentering the labor force; 2)
for women outside the employment system, who are likely to remain
there, the opportunity costs are quite low. Our results run counter
to a widely held belief that young East German women become unemployed
because they get pregnant. Instead, our longitudinal analyses suggest
that the timing goes in the other direction: women become pregnant
after they are unemployed.
James C. Witte, Department of Sociology, Northwestern
University Gert G. Wagner, Ruhr University of Bochum and German Institute
for Economic Research, Berlin
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