Couples’ transition to parenthood in Finland: A tale of two recessions.

Abstract: The question of how fluctuations in the business cycles and fertility are linked resurfaced in the aftermath of the Great Recession of 2008-09, when birth rates started declining in many countries. Finland, although affected to a much lesser extent than other regions of Europe, is no exception to this decline. However, previous macro-level research on the much stronger recession in Finland in the 1990s shows that, contrary to other developed countries, the typical pro-cyclical behavior of fertility in relation to the business cycle was absent. The objective of this paper is to test how a typical feature of both recessions at the individual level, labor market uncertainty, is linked to childbearing risk in Finland. In particular, I focus on the transition to first birth and on the explicit period comparison between the 1990s and the 2000s. I use Finnish population registers (1988-2013) and adopt a dyadic couple perspective to assess the association between each partner’s employment status and the transition to parenthood. Finally, I investigate how, differently in the two periods, the latter relationship changes depending on aggregate labor market conditions to test whether there was a change over time from counter- to pro-cyclicality of fertility in Finland.