Childhood shocks and fertility: evidence from parental job loss

Abstract This paper examines whether adverse childhood economic shocks affect fertility in adulthood. Using Finnish administrative data and plant closures during the 1991–93 recession as exogenous parental job loss, I estimate long-run effects on children’s fertility. Paternal job loss reduces sons’ probability of parenthood by age 43 by 1.7 percentage points, while maternal job loss is positively associated with sons’ fertility and accelerates daughters’ childbearing without affecting completed fertility. Paternal displacement persistently lowers sons’ education, employment, and earnings; mediation analysis suggests that these socioeconomic scarring effects explain about half of the fertility decline. The remaining effect appears to operate through non-pecuniary mechanisms, such as family stress. Maternal job loss does not affect children’s socioeconomic outcomes, pointing to non-pecuniary channels, including changes in parent–child relationships. Overall, the findings indicate that economic shocks in adolescence have lasting intergenerational consequences for demographic behavior.