The Peculiar Relationship between Wages and Birthrate

Women with higher wages are less likely to conceive a child when younger than 30, while in the following decade they bear more children than the rest. And at 40 there are no differences, a study by Aasve, Rondinelli and Billari finds

A work-family balance is difficult to reconcile in Italy. According to the study Women’s Wages and Childbearing Decisions: Evidence from Italy, by Concetta Rondinelli (Bank of Italy), Arnestein Aassve and Francesco Billari (Bocconi), the relationship between female employment and birthrate in Italy reflects higher number of hours that women dedicate to housework, less opportunities for part-time work (the rate of part-time employment was 28% in Italy in 2008, but 48% in Germany) and low availabilities of nursery schools (in Italy only 6% of children between 0 and 3 years old attend nursery school, while over 40% of children in France do). Further difficulties burden our country: income available to families has been stagnate for over ten years; public policies for supporting families, especially those with children, have been modest in amounts, and fragmentary, not systematic.

Though growing over recent years, participation of women on the job market remains low in Italy (47% in 2008, 58% overall in EU countries), and it is still far from the objective set out at Lisbon, which fixed the rate of female employment at around 60% for 2010. In addition, especially starting in the ‘90s, the birthrate in our country has demonstrated a strongly decreasing trend, reaching 1.2 children per woman in 1995, with a slight increase to 1.4 children in 2008, a figure which remains the lowest among the major European economies. Regarding this matter, the decline in the Italian birthrate can be entirely ascribed to a reduction in the number of children after a first child.

The research demonstrates that the role played by economic factors in the transition to a first, second and third child is ambiguous at the start. If on one hand it is easier for more well-to-do families to access the assistance services for children available on the market, on the other hand, when comparing the costs and benefits of putting off having children, the same families tend to choose the moment in which taking the mother out of the job market is less of a burden, both in terms of a decrease in the value of human capital, but especially in terms of career prospects. However, a late maternity is not without consequences when having more than one child: biological clocks could either prompt women who have postponed having their first child to accelerate a second or to not have other children.

The effect of women’s salaries on the inclination to become first-time mothers is not straight-forward: increased availability of economic resources reduces this inclination until around 30 years, increasing after that. The trend varies, however, among women, and depends on salary levels: less wealthy women tend to anticipate maternity to between 27-28 years, while those who are more well-off postpone it to 33-34 years. The latter invest more in education, spending more time on the job market before becoming mothers; with higher salaries, it becomes more of a burden to take time off from work to commit themselves to raising children. At 40 years, however, the two groups stabilize at very similar birthrates.

The researchers stress that economic resources have less of an effect on the transition to a second child: increased availability seems to increase the probability of having a second child in the 3-4 years after the first child’s birth. This seems to have less of a role on the decision to have three children.

The choice to have more than one child is very dependent on educational and cultural contexts, however. In fact, there is a marked difference between macro-areas in Italy: the women of the North are more reproductive, considering the quantity and quality of the social services available for reconciling work and family needs.

The study concludes that economic supplies, which define the moment of the first child’s birth, take on a marginal role for subsequent births; for other children, an important aspect is the accessibility of both public and private services on the market.