Uncertainty in the labour market: How does fixed-term employment affect fertility and mental health of the young generation?

30 January 2015

Wolfgang Auer (Ludwig Maximilian University of Munich and Ifo Institute, Munich) and Natalia Danzer (Ludwig Maximilian University of Munich, Ifo Institute, Munich, and IZA Bonn) study the short- to medium-run effects of starting a career on a fixed-term contract on fertility and health outcomes. We focus on the career start since we expect that temporary contracts and their inherent economic uncertainty imply a path dependence which might have spill-over effects on other domains of life. Our empirical analysis is based on data from the German Socio-Economic Panel which provides information about individuals’ labour market history, fertility behaviour, and physical and mental health indicators. Our main results are that due to fixed-term employment at labour market entry women tend to: postpone first births, have fewer children within ten years after graduation and have lower mental health status within three years after graduation. These associations are strongest in the subsample of native women with secondary education. In contrast, we find no significant correlations for men. We argue that these findings are robust to potential endogeneity threats.

keywords: the beginning of a career, a contract for a fixed term, economic uncertainty, delay motherhood, fertility, mental health, satisfaction with life
JEL codes: 
publication year: 2015
language: english
Publications category:  ,
publishing series: IBS Working Paper
publication number: 06/2015
ISSN: 2451-4373
Additional information:

Thank you Helmut Rainer, Christian Holznerowi, Regina Riphahn, and an anonymous reviewer, as well as the participants of conferences and seminars in Braga, Dusseldorf, Ljubljana, Mannheim, Munich and Warsaw for helpful and constructive comments. The scientific work of the Foundation received a grant of IBS in Warsaw, according to the program Network for Jobs and Development, developed jointly with the World Bank. All opinions presented are those of the authors and do not necessarily reflect the views of the Foundation of IBS.

Projects related to this publication:

Ludwig Maximilian University of Munich, Ifo Institute, Munich, and IZA Bonn

Ludwig Maximilian University of Munich and Ifo Institute, Munich

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