Temporary employment and fertility in Italy: The effect of two labor market reforms in the early 2000s

This paper presents compelling evidence that the extensive use of temporary contracts in Italy affects fertility. Using work histories between 2003 and 2010 for specific reforms in the fixed-term and apprenticeship contracts that have been gradually applied since 2005, we examine the propensity of women to have children. Our findings point towards a significant negative impact on fertility outcomes, although the magnitude of these estimates is small. These results are heterogeneous dependent on the employment status of the women's partners, suggesting that partners' permanent contracts leave fertility behavior unaffected. Women with partners on temporary employment contracts have a lower chance of having children. We thoroughly explore the potential explanations for our results. Temporary contracts lead to more economic uncertainty, which we identify by the increase in wage volatility, the reduction in the probability to be in a couple, and - for the first child - childbearing postponement.