Businesses, Buddies, and Babies: Fertility and Social Interactions at Work

Abstract

In this paper we thoroughly examine the influence that co-workers’ childbearing has on each other’s subsequent fertility decisions and the reasons why. Using linked-employer employee panel data for Sweden we show that individual fertility increases with on average 10% if had a child within the previous 12-24 months. The timing of births among co-workers of the same sex, and co-workers who are close in age are even more influential. Consistent with a model of social learning we find that the peer effect for first time mother is similar irrespective of the birth order of the co-worker’s child, while for higher order births within-parity peer effects are strong but cross-parity peer effects are entirely absent. A causal interpretation of our estimates is strengthened by several falsification test showing that neither unobserved common shocks at the workplace level, nor sorting of workers between workplaces are likely to explain the observed peer effect. We also provide evidence suggesting that peers not only affect timing of births but potentially also completed fertility, and that fertility peer influences spills-over across multiple peer networks. Our results suggest that social interactions are an important factor behind the high between-workplace variance in fertility and the strong inter-temporal fluctuations in total fertility rates observed in many countries.

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