Fertility and the digital divide: More flexibility, more children?

The rapid diffusion of the Internet, and in particular of high-speed, broadband Internet, has characterized the life-changing digital revolution that began around the turn of the twenty-first century. The profound social and economic implications of the spread of the Internet have been highlighted since its inception by social science scholars. More recently, researchers have also started to focus on the effect that the Internet has on family life. Scholars interested in family and fertility have long been focused on the importance of technological change.

Shifts in contraceptive technology, alongside the development of household appliances and medical advances, have been pointed to as some of the preconditions for the massive reproductive changes and the parallel large increases in women’s education and labor force participation that took place in high-income societies during the last period of the twentieth century. The discussion on low fertility, however, has not as of yet focused on the role of broader technological change and how it could shape the future of demographics, with the digital revolution epitomizing such technological change.

DSL technology boosts fertility of highly educated women

In a new IZA discussion paper, Francesco C. Billari (Bocconi University), Osea Giuntella (University of Pittsburgh and IZA) and Luca Stella (Bocconi University and IZA) analyze the impact of the diffusion of high-speed Internet on fertility choices in a low-fertility setting, Germany.

The authors exploit an instrumental variable approach devised by Falck et al. (2014) relying on unique historical and technological peculiarities of the public telephone infrastructure in Germany which affected the diffusion of DSL technology throughout the country. Using data from the German Socio-Economic Panel (2008-2012), they show that DSL access increases fertility of 25-45 year-old women and that these results are largely driven by highly educated women. The rise in fertility mostly reflects an increase in the probability of having more than one child.

Internet access may help bridge competing work-life goals

Moreover, the researchers investigate the potential mechanisms underlying the relationship between Internet and fertility. Their results suggest that broadband may increase fertility by increasing the opportunities of working from home and/or working part-time. These effects may relax time constraints, especially among more educated women, thereby favoring the work-family balance. They conclude that broadband might introduce a “fertility digital divide,” allowing highly educated individuals to realize their fertility goals, while not improving the chances of low-educated individuals, who tend to be employed in less flexible occupations.

Download the paper (IZA DP No. 10935):

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Teenage daughters as a risk factor for divorce

Sullen exchanges, inexplicable silences and broken curfews can be part of life for parents of teenagers, but could this period be also a stress-test for parents’ marriages? A new IZA Discussion Paper finds that parents of teenage daughters are more likely to separate than parents of teenage sons. We wanted to know more from the authors, IZA fellows Jan Kabatek and David Ribar of the Melbourne Institute.


Jan Kabatek

What is the main finding of your paper?

Our research studied more than two million marriages in the Netherlands over twenty years and showed that divorce risks faced by Dutch couples are dependent on age and gender of their children. The risks increase with children’s ages up to the point when children reach adulthood, and parents of teenage daughters are at greater risk still.

Has this topic been researched before?


David Ribar

The associations between marital strains and children’s gender were first identified by American sociologists in the 1980s. Economic research followed later, and several studies in the United States have indeed found that parents with first-born girls are slightly more likely to divorce than parents with first-born boys. However, until now, there was no evidence from other developed countries which would confirm that daughters strained marriages, and the heterogeneity of the gender effect remained largely unexplored.

Your study uses registry data from the Netherlands. Why Dutch data?

Compared to the data used in most previous studies, the Dutch administrative records are advantageous in several ways. They allow us to analyze a very large pool of marriages, the sample selection issues are minimal, and the records themselves are exceptionally comprehensive. We can look at exact dates of weddings, births, and divorces and delve deeper than studies which relied on self-reports and people’s recollections. More importantly, the data also allow us to link all parents to their children and examine just how long after their birth the couples separated.

What was the most striking result?

We found that the gender effect does exist among the Dutch parents, however it is strictly confined to the teenage years. Up until the age of 12, the gender of the child has no influence on the divorce risks faced by the parents. It is only between the ages 13 and 18 that parents of first-born girls divorce more frequently than parents of first-born boys. This finding contrasts prior evidence from US censuses, which documented significant differences of divorce risks for American families with children aged 0-12.

How does the teenage effect translate into numbers?

Conditional on staying married throughout the first twelve years of the first-born’s life, the odds of divorce are 10.7% for parents of teenage boys, and 11.3% for parents of teenage girls. In relative terms, this means that parents with teenage daughters face 5% higher risks of divorce than parents with teenage sons. The effect peaks at the age of 15, when the risk faced by parents with daughters is almost 10% higher than the risk faced by parents with sons. In the following years, the differences narrow again, and they disappear once the child turns 19. A similar pattern is also found among second-born and subsequent children.

Does this mean that Dutch parents have a preference for sons?

We don’t think so. The null finding for families with young children goes against the standard son-preference hypothesis, which implies that the mere presence of male children would make the marriage stronger. Furthermore, son preference would also influence fertility levels, rendering them higher for families with first-born girls. However, similar to recent US evidence reported in another recent IZA discussion paper, we find the exact opposite: families with first-born girls have slightly fewer children than families with first-born boys.

So what are the reasons why daughters might raise divorce risks?

We do not find evidence supporting several other well-established arguments, such as the theory which assumes that boys are more vulnerable and their need of male role models makes fathers more committed to the marriage. The same is the case for a sex-selection theory which postulates that mothers whose marriages are more stressful may be more likely to give birth to a baby girl.

Instead, our findings suggest that the higher divorce rates are explained by strains in the relationships between some parents and their teenage daughters, possibly stemming from differences in attitudes to gender roles. This explanation is backed by analysis of a large survey of Dutch households, which asked families about their relationships and opinions regarding marriage, gender and parenting.

What did the families say?

Parents of teenage daughters disagreed more about the way they should raise their children, and expressed more positive attitudes towards divorce. They were also less satisfied with the quality of their family relationships. Teenage daughters, in turn, reported worse relationships with their fathers, though not with their mothers.

Dads just don’t connect with their daughters?

Such a statement would be taking the empirics too far. Our findings do, however, suggest that the relationship of the father and his daughter is an important piece of the puzzle.

In one exercise, we split the administrative sample into two groups, depending on whether the father did or did not grow up with a sister. Our hypothesis was that the fathers who had more experience relating to teenage girls via their sisters would experience fewer relationship strains with their own teenage daughters. This could occur because fathers with sisters may hold more egalitarian attitudes towards gender roles, or because they have a better understanding of teenage girls and their family interactions.

In line with this reasoning, we found that the fathers who grew up with sisters did not face any increase in divorce risks from teenage daughters. The gender effect only appeared among fathers who grew up without sisters.

Do other family characteristics play a role?

We looked at other characteristics that could indicate differences between the gender-role attitudes held by the parents and their daughters, such as the ages or immigration background of the couple. Here, we also found that the parents who are likely to hold more traditional attitudes towards gender-roles experienced higher increases of divorce odds from teenage daughters.

Are the increased odds of divorce from teenage daughters unique to Dutch married couples?

It doesn’t seem so. We find the same associations for Dutch couples in de facto relationships, and our analysis of the Current Population Survey confirmed their existence also among married couples in the US. Importantly, we show that while we cannot reject the existence of a small gender effect for US families with children aged 0-12, we can demonstrate that such an effect is clearly dominated by the disparity that emerges in the teenage years. Compared to the previous estimates of the gender effect for US families with young children, the teenage effect derived from the CPS data is more than ten times larger. It is also substantially larger than the teenage effect found in the Dutch data.

So should parents of girls be worried they might be destined for divorce?

Not really. Despite their relative significance during the teenage years, the differences in the divorce risks faced by families with boys and girls remain modest over the child’s lifetime. By the time their first-born children reached age 25, 311 of every 1,000 Dutch couples with daughters had divorced, which can be compared to 307 of every 1,000 with sons—a difference of only 4 divorces per 1,000 couples.

Furthermore, the finding of a null effect among fathers who grew up with sisters shows that the association between the children’s gender and divorce risk is not universal. That being said, our study does point to serious strains between some parents and their teenage daughters, and help us understand the factors contributing to family break-down.

What can parents do to reduce these risks?

Our results suggest that parents of teenage daughters would do well to adopt more egalitarian attitudes towards gender roles and a greater understanding of how conflicts could come up. Struggles with teenagers will still happen, but better preparation and knowledge of the wants and needs of their teenage daughters could reduce the strain between partners.

Providing our children with role models who have modern attitudes toward gender roles, and promoting open communication within the family unit may contribute to a lowering of the rate of divorce or separation.

Thank you very much!


Download the paper (IZA DP No. 11046): Teenage Daughters as a Cause of Divorce

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Countering absenteeism by bringing temporarily disabled workers partly back to work

Disability rolls have been rising for decades in many OECD countries, entailing both a substantial volume of labor withdrawn from the market, as well as heavy social security costs. This has led to increased attention on the trade-off between generosity towards those hit by a negative health shock and potential moral hazard problems that faces any social security system. Traditional responses to this trade-off have been to establish strong screening criteria or other gatekeeping policies, or to limit the level or duration of benefits.

Activation reform in Norway

A new IZA Discussion Paper by Øystein Hernæs (Institute for Social Research and IZA) tries to answer whether an activation strategy based on graded sickness insurance, i.e. requiring temporary disabled workers to be partly back at work to the extent possible, as opposed to any absence automatically being 100%, can help reduce absenteeism and curb the corresponding social security costs. The paper analyzes a program implemented in the Norwegian region of Hedmark in 2013 aimed at strictly enforcing an already existing requirement that an employee on long-term sick leave be partly back at work unless explicitly judged by a physician to be unable to work at all, irrespective of adaptions at the workplace.

Absenteeism goes down markedly

The results show that the program to make use of the partial work capacity of workers on long-term sick-leave reduced absenteeism by 12 percent and brought large savings to the social insurance system. The effects were remarkably similar across gender and age groups, and somewhat smaller in the construction sector. Hernæs finds evidence that the absence rate declined not only through exploiting the partial work capacity of temporary disabled workers, but also by speeding up the transition rate back to full-time work. Consistent with expectations, the largest decline occurred for absenteeism due to musculoskeletal disorders, the smallest for respiratory disorders, with diagnoses for psychological and other disorders in between.

Viable alternative to traditional policies

Such an activation strategy represents an alternative to traditional attempts at welfare reform involving stricter screening or reductions in generosity, and may be more compatible with already existing legislation and contractual obligations, as well as easier to find support for across political priorities, according to Hernæs.

Download the complete paper (IZA DP No. 10991):

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Can debt restructuring help households out of the debt trap?

bankruptcyDuring the last financial crisis, the indebtedness of households and the number of bankrupt households reached levels that had not yet been experienced on a worldwide scale. In such an environment of high private debt, the policy debate seems to have shifted from the establishment of an ex ante “optimal” bankruptcy regime to the implementation of “ex post” special policy programs to restructure the debt of households in financial distress. A large number of policy initiatives were launched to ease the restructuring of household debt.

One aspect that has received little attention is the impact of the debt restructuring on the ability of the household to escape from the debt trap. A new IZA Discussion Paper by Henri Fraisse (Banque de France) studies for the case of France how debt suspensions influence the re-filing for bankruptcy.

Strong but short-lived effect on the likelihood to re-default

The author finds that granting a household a two-year suspension of debt repayment significantly and strongly decreases the likelihood of a re-default. A suspension of debt repayment leads to a 36.9% decrease in the probability of a re-default over the seven years following the bankruptcy decision of the marginal household.

The figure below reports the magnitude of the impact of the suspension over the years that follow. The suspension appears to have a significant impact in the first four years on the probability of re-default, reaching its peak in the second year following the decision. Five years after the decision – conditionally on not having previously re-defaulted – the probability of re-default is the same whether or not the household benefits from the grace period. For these households, the grace period therefore does not further disincentive repayment, nor give sufficient relief to further decrease the risk of re-default.


Re-default effect of a two-year suspension of debt repayment over the years relative to the year of the bankruptcy decision (2008)


Key drivers: expenditure rate and characteristics of the credit providers

Fraisse then measures how the impacts depend on the characteristics of the filers. He finds higher re-default effects for the population of filers who are in more dire financial straits. Unemployed filers with very low incomes and higher levels of indebtedness are substantially less likely to re-default following a suspension of debt repayment. However, neither the number of creditors,  nor the dispersion of the debt – in sum, the overall debt structure – seem to lead to significantly different re-default effects. The collective restructuring that is offered by the bankruptcy process seems to compensate for the relative higher financial fragility of households with atypical debt structures.

One key driver of heterogeneous effects is the expenditure rate. Low levels of expenditure rates are related to a non-significant effect of debt suspensions, whereas the likelihood to re-default is 67% lower for the population in the top quartile of the expenditure rate distribution in comparison with the bottom quartile. Fraisse further observes noticeable heterogeneous effects among providers of consumer credits. Following a suspension, a customer of one bank has a 3 percentage point lower probability to re-default than a customer of another bank. These results suggest that some banks target more financially fragile households.

In sum, these results indicate the importance of debt restructuring programs to help households to escape poverty trap. They also underline the necessity of policy actions on budget counseling, as well as the importance of regulation of credit distribution to avoid both entering into bankruptcy and re-filing for bankruptcy.

Download the complete paper (IZA DP No. 11032):

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How tax policy can promote lifelong learning

adult-education-2706977_960_720In the face of demographic and technological change, people will have to work longer and are more likely to switch jobs, careers, or tasks within a given job. Faster depreciation of human capital increases the need for lifelong learning. Some governments have therefore tried to promote lifelong learning through financial support or information campaigns.

In a recent IZA Discussion Paper, researchers from the CPB Netherlands Bureau for Economic Policy Analysis assess the effectiveness of Dutch tax policy, which allows workers to deduct expenditures on post-initial work-related training and education from their pre-tax personal income. The authors, Wiljan van den Berge, Egbert Jongen and IZA Fellow Karen van der Wiel, examine how jumps in marginal tax rates affect the probability of fi ling lifelong learning expenditures and the amount of such expenditures for different subgroups.

High-income earners more likely to invest in lifelong learning

Their analysis finds that tax deductions are effective only for some groups: Among singles, those at a relatively low level of income (around 18,000 euros) do not take advantage of the tax incentives to invest in lifelong learning at all, while for those with a relatively high income (around 55,000 euros) the probability to invest in professional education increases by 10%. Among couples, primary earners are also more responsive to making use of the tax deductions. The researchers observe that secondary earners tend to shift their investment in lifelong learning to their better-earning partners.

From a policy perspective, the low responsiveness of low-income singles seems most problematic. The authors explain that many people with a lower income are uninformed about possible tax breaks or tend to underestimate the utility of investing in lifelong learning measures and making long-term career plans. Those with a lower educational background often dislike formal learning and are psychologically not inclined to attend a school again. Tax deductions should thus be accompanied by information campaigns specifically targeting those at the lower end of the income distribution.

Download the complete study (IZA DP No. 10885):

Read more about lifelong learning on IZA World of Labor:

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The labor market in Japan, 2000–2016: A role model for aging societies across the globe

IZAWOL385-chart1A new IZA World of Labor report looking at developments in the labor market in Japan since 2000 finds that despite a plummeting working-age population, Japan has sustained its labor force size, thanks to surging employment among women.

Aging populations pose challenges to the fiscal sustainability of many countries as a consequence of shrinking workforces and increasing costs for social insurance programs. As the third largest economy in the world and a precursor of global trends in population aging, Japan’s recent experiences provide important lessons regarding how demographic shifts affect the labor market and individuals’ economic well-being. According to IZA fellow Daiji Kawaguchi (University of Tokyo) and Hiroaki Mori (Hitotsubashi University), Japan’s experience exemplifies how rapid population aging affects the structure of the labor market through an expanding healthcare services industry.

Fast increase in female labor force participation

The two economists found that despite the sharp decline in the working-age population in Japan, between 2000 and 2016 by slightly less than 10 million, the size of the labor force remained relatively stable during this period. The stability of the labor force reflects the fast-increasing labor force participation rate (LFPR) among prime-age women (aged 25−54). While the LFPR among prime-age women was somewhat stagnant during the 1990s, it rose by nearly 10 percentage points, from 66.5% to 76.1%, between 2000 and 2016. It is particularly in the Health Care Industry that Women’s employment increased sharply, by about 2.5 million. Consequently, about 21.6% of female workers were employed in the healthcare services industry in 2016.

The fast-growing elderly population appears to be a main driver of the rising employment in the healthcare services industry. Traditionally, healthcare sectors in Japan, similarly to those of many other countries, tend to employ more women than men. As a consequence, female labor force participation is increasing and more than one in five female workers are currently employed in the healthcare services industry. Japan’s experience suggests that population aging may have profound influences not only on the labor supply but also on labor demand.

The growth of the healthcare sector is a foreseeable development in aging societies and one that politicians need to factor into their labor market policies. Securing an adequate supply of healthcare workers and childcare professionals (who enable women to work) is a key policy issue. Carefully designed interventions in those industries may facilitate an efficient division of labor and help dealing with the problem of an aging work force.

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Equality of opportunity – for what?

By Daniel Mahler and Xavi Ramos

The notion that individuals ought to have equal opportunities in life is popular among politicians, the general public, and philosophers alike. It is deeply embodied in the American Dream and has resonated with politicians ranging from Margaret Thatcher to Nelson Mandela.

Although there is wide agreement on the objective of providing equal opportunities, it is not altogether clear what, exactly, there ought to be equal opportunities for. The last decade has seen a rising discussion about whether we should go ‘beyond GDP’ – beyond income – when measuring societal well-being. This very same discussion can be applied to providing equal opportunities. Should individuals have equal opportunities for acquiring income? Or is there more to individuals’ well-being than just income? These discussions are not purely of theoretical interest; evidence shows that the concept of well-being we employ matters for assessments of both poverty and welfare.

By now, a sizable number of empirical studies have been carried out analyzing the extent to which individuals have equal opportunities for income acquisition (see Ferreira & Peragine (2016) for an excellent recent review). In general, these studies measure opportunities by predicting individuals’ income based on a range of factors outside the realm of personal responsibility, such as individuals’ gender, birth area, and their parents’ education. These predictions can be thought of as the opportunities of individuals; individuals with a high predicted value come from a fortunate background with high chances of succeeding, and vice versa. Under this interpretation, inequality of opportunity can be calculated as the inequality in the predicted incomes.

However, if there is more to life than just income, perhaps we need to rethink – and re-measure – what we ought to provide equal opportunities for.

In a new IZA discussion paper, we set out to do just that on German data. Besides looking at whether individuals have equal opportunities for acquiring income, we utilize three other measures of well-being: A multidimensional index, life satisfaction, and equivalent incomes. Based on this, we look at whether trends in inequality of opportunity over time and a characterization of the most opportunity-deprived depend on what we want to equalize opportunities for.

To our surprise, it doesn’t.

To illustrate this, suppose we rank a population according to their opportunities for acquiring income. The ones standing furthest to the left have the lowest opportunities (the lowest predicted income), while the ones standing furthest to the right have the highest opportunities. We then ask everyone whose father only had primary education to take one step forward. The more to the left these people stand, the lower opportunities for acquiring income individuals with a low educated father have. We can re-rank the population according to their opportunities for having a high life satisfaction, once again ask the ones whose father had a low education to take one step forward, and see where they rank. If they stand approximately the same place as before, then fathers’ education plays the same role in predicting opportunities regardless of whether we want to equalize opportunities for income or for life satisfaction.

The figure below shows that individuals stand approximately the same place, regardless of which of our four well-being measures we utilize. This applies not only to fathers’ education, but also to a range of other factors outside the realm of personal responsibility. Individuals with low educated parents, individuals whose father was a blue-collar worker or unemployed, individuals who grew up on the countryside, and (for the most part) women, are always opportunity-deprived.

Based on IZA Discussion Paper No. 10940, Figure 2, p. 28.

So why does the measure of well-being hardly matter for equality of opportunity, when previous studies have shown that how we measure well-being matters greatly in a range of other contexts? We believe the intuition is straightforward. Some people may have a high income but a low satisfaction with life, and vice versa. However, for any plausible account of well-being, we always expect individuals coming from a poor background with uneducated parents to have lower levels of well-being. Regardless of what we want to equalize opportunities for, the individuals with the lowest opportunities will, broadly speaking, be the same.

Perhaps this is good news. Whereas the debates about how to measure societal well-being are long and intricate, we may be able to sidestep this whole discussion if our policy objective is to provide equal opportunities.

Download the complete paper (IZA DP No. 10940):

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