What Can We Learn from the Public Sector in Germany Regarding Fertility? Is It Really the Workplace or Just Selection?

In Germany, as in many other European countries, low fertility rates are a persistent problem for, last but not least, the funding of the welfare state. The difference between the desired and the actual number of children is high and female labor force participation is lower than that of males. For several European countries, it has been shown that women working in the public sector possess higher fertility rates compared to the private sector. Until now it is unclear if this holds true for Germany and the jobs provided by the welfare state in a phase of major transitions, what the concrete mechanisms are, and to what extent selection accounts for the public sector effect. This paper enhances our understanding and gives new insight into what characteristics of public sector jobs drive increased fertility. First, based on a wide range of theories and explanations regarding fertility rates (family economics, human capital theory, compensating wage differentials, occupational sex segregation, labor legislation), job and working place characteristics that enhance or decrease fertility are identified. Second, it is argued why and how public sector jobs should feature these characteristics and allow for a better work-family-balance. Third, the mechanisms that should influence fertility positively or negatively are tested empirically. A stepwise multivariate discrete event history data analysis with a piece-wise-constant specification is implemented. The transition to the first child conditional on a job in the public or private sector is calculated. The longitudinal data set Panel Analysis of Intimate Relationships and Family Dynamics (Pairfam) is used, which offers rich information on the motives and planning for family formation. This allows to especially address the problem of selection and to ensure that public sector characteristics drives higher fertility and not self-selection. The results can expand our knowledge of how fertility rates can be increased.