If you are satisfied with your life you have the second child. The role of subjective well-being on fertility, controlling for personality traits: evidence from the German Socio Economic Panel data

Marco Le Moglie, Università degli Studi di Torino and Collegio Carlo Alberto
Letizia Mencarini, Università degli Studi di Torino and Collegio Carlo Alberto
Chiara Rapallini, Università di Firenze

We contribute to the still limited literature concerning the role of individual subjective well-being (SWB) on fertility, conducting a study by child parity with the German Socio Economic Panel (GSOEP) data. The analysis shows that the impact of SWB on childbearing decisions is only significant (and sizeable) for the second child. This result is relevant not only because confirms that in a context such the German one, where Total Fertility Rate (TFR) is now as low as 1.4 (and been so for the last decade), the decision to have the second child is the crucial one for the targeting of family policies, but also because it shows the relevance of SWB in the design of these policies.. Furthermore, our findings are particular robust: thank to the rich and long longitudinal data of the GSOEP, we are able to measure the effect of SWB on the temporally subsequent fertility behavior, eliminating the tricky issue of the reverse causality and carefully controlling that such effect would not be caused by the effect of personality traits (the “big five” traits, here PT) both with SWB and fertility. This specific result assures that – nevertheless PTs are a strong component of SWB variability – the effect of SWB on fertility is not determined by PTs, leaving therefore room for adequate policy measures aimed to rise individual SWB, which in turn would sustain fertility.