This paper studies how fertility decisions respond to an improvement in job stability using variation from the large and unexpected regularization of undocumented immigrants in Spain implemented during the first half of 2005. This policy change improved substantially the labor market opportunities of affected men and women, many of which left the informality of housekeeping service sectors toward more formal, stable, and higher paying jobs in larger firms (Elias et al., 2023). In this paper, we estimate the effects of the regularization on fertility rates using two alternative difference-in-differences strategies that compare fertility behavior of “eligible” and “non-eligible” candidate women to obtain the legal status, both on aggregate and at the local level. Our findings suggest that gaining work permits leads to a significant increase in women fertility. Our preferred estimates indicate that the regularization increased fertility rates among affected women by around 5 points, which is a 10 percent increase.
Suggested citation:
Monras, Joan, Eduardo Polo-Muro, and Javier Vázquez-Grenno. 2023. “Labor Market Stability and Fertility Decisions.” Federal Reserve Bank of San Francisco Working Paper 2023-36. https://doi.org/10.24148/wp2023-36