Disentangling the Role of Composition Factors in Fertility Responses to Unemployment

Abstract

Using a macro-panel data set from 20 Italian regions, this study explores the relationship between unemployment and fertility in Italy between 2006 and 2018. It contributes to recent literature on this subject by considering gender-specific unemployment measures and examining the influence of two important compositional factors on fertility responses, namely the presence of foreign women and daily childcare coverage, and the influence of both of these on the link between unemployment and fertility. The study reveals a procyclical relationship between unemployment rates, used as a proxy of variations in business cycles, and fertility. Positive influences of foreign women’s contribution and daily childcare coverage on fertility are uncovered, suggesting a potential mitigation effect on declining fertility trends during the period under observation.