The consequences of parenthood and second birth rates in Europe: The puzzling case of income gains and losses

People's labour market positions as well as their situation at home are usually greatly affected by the transition to parenthood. Changes at home and at work tend to be different for men and women. This paper will investigate how these changes in the aftermath of a first birth affect the transition to a second birth. Existing studies on the determinants of second birth rates tend to look only at the effect of the situation after the first birth. This paper aims to go beyond earlier work by adopting a truly sequential perspective, acknowledging that each parity progression is influenced not just by changing conditions but also by the change in conditions ("history matters"). How do the consequences of a first birth influence parents' decision to have a second child? The basic hypothesis, to be tested empirically using panel data, is that if entry into parenthood has undesirable consequences for one or both parents at home or at work, then it may be less likely that the couple goes on to have a next child.