_ Yishay Maoz, Assistant Professor in the Department of Economics, University of Haifa; Matthias Doepke, Professor of Economics, Northwestern University; Research Fellow, CEPR; Moshe Hazan, Associate Professor of Economics, Tel-Aviv University; Research Fellow, CEPR. 8 September 2008.
Europe faces a fertility crisis, but not for the first time. The 1930s saw a similar situation but fertility recovered in the 1950s. This article assesses the historical lessons. The news is not good. Recent research shows that the post-war baby boom happened because young women were denied opportunities in the labour market due to discrimination and competition with older women who acquired job experience during the war.
After decades of falling fertility rates, Europe faces an imminent demographic crisis.1 In 2006, fertility rates were below 1.4 children per woman in Germany, Italy, Spain and all of Eastern Europe (see Table 1).2 Strikingly, not one European country showed a fertility rate of 2.1 or above, the “replacement level” that maintains a constant population size. Unless Europe’s lack of babies is made up for by a huge increase in immigration, at current trends most European countries will soon experience declining populations. Can anything be done to reverse the European baby bust?
Table 1. Total fertility rate in 2006 in the EU and selected European countries
Source: Eurostat/CIA World Factbook
Europe has seen low fertility before
At a quick glance, history might appear to offer hope that today’s low fertility can be overcome. Western Europe faced a similar situation in the 1930s, with fertility rates in a number of countries dipping below the replacement level for the first time. Then, as now, observers painted bleak pictures of a shrinking, ageing population and dire economic outcomes.
Today, we know that the crisis never materialised. Birth rates started rising again from the mid-1930s, culminating in the famous post-war baby boom lasting until the late 1960s. Why won’t the current low birth rates be followed by another baby boom?
A close inspection of the causes of the post-war baby boom gives little hope for more babies coming to rescue us today. More than anything, the jump in birth rates in the 1950s was fuelled by a stark disparity in the economic opportunities of young men and young women.
Gender inequality helped spur the post-war baby boom
The economic boom of post-war reconstruction delivered fast-growing economies and low unemployment in Europe. In this environment, young men could easily find secure employment enabling them to support a family.
But for young women in the 1950s and early 1960s, labour market opportunities were still largely restricted to traditionally female areas such as secretarial work or retail jobs. Many countries explicitly discriminated against women in the labour market. In parts of Germany, for example, until the 1950s female teachers were required to resign from their jobs once they married.
So, for young women, confronted with a lack of work opportunities – but an abundance of prosperous young men – getting married early and having a large family was a natural choice.
World War II worsened labour market conditions for young women
Of course, gender discrimination in the labour market was already widespread before the arrival of the baby boom. For fertility rates to rise, a second factor had to come into play – the surge in labour market participation of older women in the 1950s. We argue in recent research (Doepke, Hazan and Maoz 2007) that much of this increase was a long-term effect of World War II.
During the war, millions of women replaced men in factories and offices while the men served in the military. The women of the war generation gained valuable labour-market experience, and many of them continued to work in peacetime. In the 1950s and 1960s, these women took up a lot of the jobs that traditionally had been held by young single women.
Figure 1. Female labour supply by age
Note: Total labour supply by younger (20-32) and older (33-60) women in the US (as a percentage of labour supply by men in the same age group)
Figure 1 shows that, in the US, labour force participation of women between the ages of 20 and 32 (the main childbearing years) dropped sharply during these decades, while the participation of older women rose quickly. As the older women took over, young women were crowded out of the labour market.
Many of these young women got married and started families a little earlier than they would have had they been employed. Ultimately, they ended up building bigger families with more children. It is the story of these younger women that explains most of the baby boom.
International evidence confirms the link between World War II and the baby boom
Our hypothesis linking World War II and the female labour market implies that the size of the baby boom should vary across countries, because only in some countries was female labour mobilised substantially during the war. Indeed, we show that the countries that experienced the biggest baby booms were Allied countries with a strong wartime demand for female labour and a large post-war increase in the labour force participation of older women (such as Australia, Canada, New Zealand and the US, see Figure 2). In contrast, in neutral countries such as Sweden and Switzerland the baby boom was far less pronounced (see Figure 3).
Figure 2. Allied baby booms
Note: Vertical axis is completed fertility rates (i.e., average number of children per woman in a given birth cohort) in the US and allies with a similar war experience. The baby boom corresponds to birth cohorts (i.e., birth year of the mother) 1920-1940.
Figure 3. Completed fertility rates in neutral countries
Note: Vertical axis is completed fertility rates (i.e., the average number of children per woman in a given birth cohort) in the US and neutral countries. The baby boom corresponds to birth cohorts (i.e., the birth year of the mother) 1920-1940.
Policy implications for the 21st century
In sum, the post-war baby boom was rooted in widespread gender inequality in the labor market combined with the after-effects of World War II. In the very different circumstances and societies of today, a repeat of the baby boom on these terms is neither viable nor desirable.
European countries may still be able to fend off their feared extinction by encouraging higher fertility levels. But rather than trying to recreate the conditions that fuelled the post-war baby boom, their policies should be geared towards making childbearing, and parenting, compatible with the 21st-century reality of greater equality in economic opportunities for women and men.
John C. Caldwell and Thomas Schindlmayr. 2003. “Explanations of the Fertility Crisis in Modern Societies: A Search for Commonalities.” Population Studies 57(3), 241-263.
Jean-Claude Chesnais. 1998. “Below-Replacement Fertility in the EU (EU-15): Facts and Policies, 1960-1997.” Review of Population and Social Policy, No. 7, 83-101.
Matthias Doepke, Moshe Hazan and Yishay Maoz. 2007. “The Baby Boom and World War II: A Macroeconomic Analysis.” CEPR Discussion Paper 6628.
Ron Lesthaeghe and Paul Willems. 1999. “Is Low Fertility a Temporary Phenomenon in the EU?” Population and Development Review 25(2), 211-228.
1 For recent analyses of low fertility in Europe and an overview of possible explanations see Caldwell and Schindlmayr (2003), Chesnais (1998), and Lesthaeghe and Willems (1999). For long run projections, see Eurostat’s recent report.
2 The total fertility rate in a given year is the sum of age-specific fertility rates over all ages. It can be interpreted as the total number of children an average woman will have over her lifetime if age-specific fertility rates stay constant over time.