PUB - Publikationen an der Universität Bielefeld

This paper shows that globalization has far-reaching implications for the economy’s fertility rate and family structure because it influences work-life balance. Employing population register data on new births, marriages, and divorces together with employer-employee linked data for Denmark, we show that lower labor market opportunities due to Chinese import competition lead to a shift towards family, with more parental leave taking and higher fertility as well as more marriages and fewer divorces. This pro-family, pro-child shift is driven largely by women, not men. Correspondingly, the negative earnings implications of the rising import competition are concentrated on women, with gender earnings inequality increasing. The market versus family choice turns out to be a major determinant of worker adjustment costs to labor market shocks. While older workers respond to the shock rather similarly whether female or male, for young workers the fertility response takes away the adjustment advantage they typically have–if the worker is a woman. We find that the female biological clock–women having difficulties to conceive beyond their early forties–is of central importance, rather than the composition of jobs and workplaces, as well as other potential causes.