New Research Links Labour Market Competition to Fertility Outcomes

A new policy brief authored by NPPI researchers Pedro Martins, Enzo Aragão de Almeida, and Luís Cabral, published by PLANAPP, finds that workers in less competitive local labour markets are significantly less likely to take childbearing-related leave — and when they do, leave tends to be shorter and wage penalties after birth are larger, with younger women disproportionately affected.

The research points to a dimension of fertility policy that is often overlooked: how labour market structure shapes individual decisions around parenthood. Supporting fertility, the authors argue, is not only a matter of childcare subsidies or family benefits — it also depends on how much genuine choice workers have in the labour market and how effectively parental rights are enforced.

The brief identifies several concrete policy levers, including promoting entrepreneurship and new firm entry, scrutinising mergers that reduce local employment alternatives, strengthening enforcement of parental rights in areas with limited outside options, and encouraging family-friendly workplace practices — including potentially experience-rating social security contributions.

Read the full policy brief here.