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Auer, Wolfgang (2016): Empirical essays on the socioeconomic consequences of economic uncertainty. Dissertation, LMU München: Volkswirtschaftliche Fakultät



German fertility rates are far below the replacement level, meaning that its population is projected to shrink. This implies a threat to sustainable economic growth and the stability of the social security system. Thus, fertility behavior is of highest interest for policymakers. Economic research has identified several reasons for the low fertility level, including changes in preferences and values, socioeconomic factors, and institutional settings. As pointed out by Garry Becker in a very simple theoretical model, economic circumstances and, especially, labor market conditions are of major importance in fertility decisions since they determine the opportunity costs of childbearing. The contribution of this dissertation is that it empirically investigates in four stand-alone research papers the socioeconomic consequences arising from economic uncertainty on the labor market. At the aggregate level, Chapter 1 focuses on the short-run effects of local labor market conditions on period fertility measures. The long-run effects on cohort fertility are presented in Chapter 2. At the individual level, Chapter 3 empirically investigates the effects of starting a career with a fixed-term contract on the quantum and timing of fertility whereas Chapter 4 turns the attention to the health consequences of economic uncertainty in early career years. The main findings suggest that economic uncertainty at the individual and aggregate level has a major influence on fertility decisions as well as the mental health status of the young generation (below age 40). However, there is strong evidence for gender-specific effects on both the individual and aggregate level meaning that women react differently to economic uncertainty during the early career years than men do. This has important implications for the policy recommendations: First, a well-designed family-oriented labor market policy should minimize the gender-specific negative consequences of economic uncertainty. Second, it should strive for a more equal distribution of the individual costs associated with flexible labor markets.