Job Security, Lasting Choices: Birth Rate Insights from Germany & Australia
Why temporary work matters more than ever for declining birth rates
A working paper from the Melbourne Institute, "Temporary employment and first births: A path analysis of the underlying mechanisms using Australian and German panel data," by Inga Laß, Irma Mooi-Reci, Martin Bujard, and Mark Wooden, reveals fresh insights into how job security affects family planning decisions. This paper offers one of the most comprehensive looks at how different types of temporary employment influence decisions to start a family.
Why it matters
Birth rates are declining across developed nations while temporary employment is rising. Understanding how job instability impacts fertility decisions is crucial for addressing population challenges and workplace policies.
The big picture
Researchers found that temporary workers are significantly less likely to have their first child than those with permanent jobs. This effect is strongest among:
Australian women and men in casual employment
German women on fixed-term contracts
Women, more broadly, who face more significant career impacts from childbirth
By the numbers
Employment patterns
Australia:
9% fixed-term contracts (2019)
19% casual employment
59% of workers aged 18-24 in temporary jobs
28% of workers aged 25-34 in temporary jobs
Germany:
14% fixed-term contracts (2019)
56% of workers aged 18-24 in temporary jobs
22% of workers aged 25-34 in temporary jobs
Fertility impacts
29.5%: Reduced likelihood of first birth for female casual workers in Australia vs permanent workers
22.3%: Reduced likelihood for German women on fixed-term contracts
47.9%: Reduced likelihood for German women with no formal contract
Financial context
Germany: 93% of pre-birth household income maintained after birth
Australia: Only 59% of pre-birth household income is maintained after birth
German childcare costs: ~1% of family net income
Australian childcare costs: ~20% of family net income
Key Mediating Factors
Money talks about having children, but job security tells an equally compelling story. The research reveals that lower wages consistently keep temporary workers from starting families across Australia and Germany. This is especially true in Australia, where families only maintain 59% of their pre-birth income compared to Germany's 93%.
The impact hits differently across genders. For men, who often serve as primary earners, it's predominantly about the paycheck. But for women, the story becomes more complex. Female workers must navigate both financial concerns and career stability - particularly crucial since they're usually the ones taking parental leave and reducing work hours after childbirth.
Job stability emerges as a critical factor, especially in Germany, where high-paying, secure employment directly affects parental leave benefits. German women show particular sensitivity to short job tenure, while their Australian counterparts worry more about job security. This makes sense given Australia's more flexible (arguably more precarious) labor market, where casual employment is commonplace.
Interestingly, while temporary workers report significant financial dissatisfaction, this doesn't directly translate to delayed parenthood as much as objective factors like actual wages and job security do. The research found that subjective financial stress matters more for German men than other groups, though the effect remains relatively small.
Between the Lines: A Tale of Two Systems
The stark differences between Australian and German approaches to work and family support tell us a lot about how institutional frameworks shape fertility decisions. With its extensive parental leave reform in 2007 and heavily subsidized childcare (costing families only about 1% of net income), Germany provides a stronger safety net for new parents. Australian families, in contrast, face childcare costs of around 20% of family income and had no national paid parental leave until 2011.
Yet both countries share a surprising similarity: they still largely follow what researchers call a "modified male breadwinner model." This means that while both parents typically work, men usually maintain full-time employment, while women often shift to part-time after having children. This traditional pattern persists despite significant labor market modernization.
The data shows that each country's temporary work sector plays out differently. In Australia, casual employment - with its higher hourly rates but no guaranteed hours - affects both genders' fertility decisions but hits women harder. German fixed-term contracts, which come with more predictability but definite end dates, primarily impact women's decisions about starting families.
The numbers tell the story: In Australia, female casual workers have a 29.5% reduced likelihood of first birth compared to permanent workers, while in Germany, women on fixed-term contracts show a 22.3% reduction. Add in Germany's declining temporary employment since 2008 (correlating with rising fertility rates), and we see how national policy choices ripple through personal family planning decisions.
Implementation challenges
Policy tensions
Need to balance worker protection with labor market flexibility
Risk of increasing temporary employment through regulation
The challenge of supporting families while maintaining employment flexibility
Wage loading trade-offs
Australian casual loading may increase temporary work
Need to address both financial and stability concerns
Balance between compensation and job security
Recent trends
Germany's temporary employment declined from 14.7% in 2008 to 12.0% in 2019, while Australia's combined temporary employment (fixed-term and casual) remained high at around 28%
Germany's fertility rate rose from 1.38 to 1.54 between 2008-2019, while Australia's declined from 1.98 to 1.67
However, researchers note the effect sizes are modest, and other factors likely contribute to these trends.
Future research needs
Impact on higher-order births
Long-term fertility outcomes
Cross-country policy effectiveness
The bottom line
While temporary employment significantly impacts fertility decisions, the relationship is complex and mediated by institutional context, gender, and type of temporary work. Policy solutions must address financial security and employment stability while avoiding unintended consequences.