Abstract

Abstract Social scientists have observed for a long time a strong negative relationship between the time spent in education and the timing of family formation. However, individual unobserved characteristics influence the two processes simultaneously: ignoring these characteristics means to overestimate the effect of exit from education on union formation and first birth. Making use of the I.D.E.A. survey (2003), which provides information on young Italians aged 23-28 and 33-38, with a total sample size of 3,000, and using a birth-month experiment the present paper explores whether a different month of birth leads to regular and relevant differences in life course decisions of young Italians. Results suggest that women born in the last month of a year are less likely to have lower secondary schooling as their highest educational attainment, and they are more likely to have achieved more advanced education. This result influences the timing of first marriage and subsequently the timing of first birth. Moreover the analysis suggests that the social age, as determined by the school cohort, rather than the biological age, is an important determinant of the timing of demographic events during the transition to adulthood. Key-words: Education, marriage, first birth, Natural Experiment, Kaplan-Meier Estimate, Cox hazard model, Logit regression model. -1 - Introduction The timing of marriage and cohabitation and in particular the timing of childbearing are increasingly important aspects of fertility patterns. In the last two decades, fertility choices have had an increasing importance for social and economic dynamics. The emergence of low fertility levels and lowest low fertility levels 1 in Europe is also the result of personal decisions taken by individuals during the period known as the transition to parenthood. Regarding the trend in the transition to parenthood in low fertility contexts, different issues can be highlighted. First, the postponement of the age at first birth: within the "Second Demographic Transition", Europeans are becoming parents much later than in the past. Actually, the scenario of the Second Demographic Transition is characterised by a control of fertility and the spread of informal union and non marital childbearing. Second, the traditional order between marriage and parenthood has more often become reversed: in the main European countries the rise in mean ages at first birth and the increase in extra-marital fertility have continued almost regularly. Third, nowadays extra-marital births are more accepted and widespread even if persist differences among countries Italy was in the early 1990s one of the first countries to attain and sustain lowest-low fertility levels. In Italy the mean age of women at childbearing has risen from 27. In their analyses of the decline of the total fertility rate below 1.3-or to lowest-low fertility levels- The study is structured as follows: after a brief description of some empirical evidence in Section 2, Section 3 outlines the existing literature and reviews the theoretical and empirical findings of previous studies on the relationship between educational achievement (in particular women's -3 -increasing educational attainment) and the timing of marriages and births. After having described the data, Section 4 presents in greater detail the main empirical findings, by considering separately the influences that the month of birth has on a) the schooling leaving age and attainment, b) the decision on the timing of marriage, c) the choice about the timing of first birth. Finally, Section 5 concludes by discussing and summarising the focal findings. Some empirical evidence In order to allow a plain comprehension of the following sections it is essential remind that the different school levels are categorized according to ISCED, the 1997 International Standard Classification of Education (UNESCO, 2003), which divides education into seven main categories, ranging from 0 to 6, that represent schooling from pre-primary to advanced research training levels. In Appendix 1 are presented the six school different levels. In Comparing the level of education and the mean age at first birth, it is interesting notice that countries with a higher percentage of population with an advanced level of education experience a first birth in an elder age 4 . Differently in Italy the mean age at first birth is extremely higher but only a small part of the population experiences a higher level of education; in these cases two are the possible explanations: 1) people with a higher level of education are ready to enter early in the adulthood; 2) in Italy exist other factors that influence the age at first birth, not only connected with the level of education attained, but also with social economic reasons. 4 Precisely in France and Germany about the 80% of the population has reached a secondary education and the recorded mean age at first birth is actually higher than in Portugal where just a quarter of the population has at least a secondary education. -4 -First marriage is a further important event in early adulthood that is potentially related to an individual's age at graduation. Education and family formation in developed countries: a review of the literature Most accepted theories in the demographic and economic literature (Willis, 1973; Barro and Becker, 1988; Livi-Bacci, 1997) suggest that female education lowers fertility through an increase in the opportunity cost of women's time where the productive technology for children is time-intensive relative to the parents' technology for their standard of living. In fact, there exist theoretical models that seek to explain the number of children born over the life-cycle highlighting female wages as the key element in the opportunity cost of childbearing. Other models as the ones of Wolpin (1984), Newman (1988), and Hotz and Miller (1988, seek to explain fertility histories as stochastic processes, where the woman is assumed to solve a sequential decision problem under uncertainty. In any case, since returns to schooling are positive, it is induced a negative relationship between education and fertility. Moreover, sociologists pointed out that women usually wait with children until after they have finished their educational careers (e.g. Blossfeld and Huinink, 1991; see also Statistics Sweden 1998). This strong effect of enrolment in education on the timing of fertility is caused by several factors -5 -high opportunity costs of failing to complete education, the high life-cycle costs of delaying completing education and delaying the entrance into the labour market, the desire to "establish" oneself in the career after completing education and before having a child, and social norms that on the one hand, the role of human capital accumulation (i.e., the specific level of qualification acquired) and, on the other hand, the role of educational enrolment itself. Using longitudinal data the authors documented a delaying effect of education on the timing of first marriage and entry into motherhood. Nicoletti and Tanturri (2005) consider the determinants of the motherhood postponement in ten European countries concluding that higher levels of education generally lead to both the postponement of parenthood and the reduction of the probability of the first birth event. According to their findings, an early completion of education and an early entry into the labour market are associated with early entry into motherhood in all European countries. In short, most dynamic models of fertility behaviour predict the postponement of motherhood as a consequence of enhanced schooling achievement. Husband's education is not expected to exert great effects, even if it plays a role shifting family budget constraint and contributing to the allocation of parents' time between market and non-market activities. Methodological approaches Educational career and family formation represent two important processes shaping the transition from childhood to adulthood, but these features are shaped by the individual's life course strategy: decisions affecting one process are potentially also affecting the other. Thus, in order to understand each process, it is important taking into account their reciprocal relationship and, at the same time, controlling for the possible existence of factors that determine both processes simultaneously. Despite this emphasis on the role of education and human capital investments and despite the consciousness of a potential causality problem, very few studies have succeeded in establishing the -6 -causal effects of "years in education" or "age at graduation" on life decisions. In particular, analyses of this question are hampered by the fact that many unobserved characteristics that affect marriage and fertility are likely to affect also the opportunities or incentives to invest in human capital: standard analyses of the relation between education and fertility are therefore likely to be distorted. Analyses that can overcome this problem need to rely on instrumental variable techniques, fixed effect models or "natural experiments" Using an instrumental variables approach, Sander (1992) shows that education is endogenous to family decisions such as marriage and divorce, and that educational enrolment should therefore be modelled as an endogenous variable when estimating the risk of getting married. If this endogeneity is ignored, the negative effect of education on marriage is underestimated. Other studies using simultaneous modelling strategies also demonstrate the endogeneity issue. Boulier and Rosenzweig (1984) show that ''schooling, marital search and spouse selection are endogenous variables influenced directly or indirectly by the total resources of parents, endowed traits of offspring, the cost of schooling, and marriage market conditions''. Finally, Lillard and colleagues (Lillard et al., 1994; Upchurch et al., 2001) argue that education and family formation behaviours are related not only through direct cross effects, but also because the allocation of time between schooling and family formation is driven by individual preferences for both kinds of activities, and for their future consequences. Therefore, the same unobserved individual characteristics influence both marriage and education processes but in opposite directions. This shows that a higher propensity toward family formation results in lower investments in human capital, and vice-versa. Given that the instrumental variables technique assumes that some components of non experimental data are random and since this near perfect random treatment has been subject to scepticism, in recent years economists, in recognition that nature itself provides perfect randomness with respect to important variables, have exploited naturally random events as instrumental variables Birth-month as a natural experiment Several studies have documented the effects of the birth month on phenomena such as the risk of suffering from schizophrenia (Nonaka et al., 1987), life expectancy (Doblhammer and Vaupel, 2001) and the sex ratio at birth (Sham et al., 1992). The use of the birth month in econometric 6 Five major random outcomes have been used as instruments: twin birth, human cloning (monozygotic twins), birth date, and gender and weather events -7 -studies of causal influences in behavioural relations, however, is quite new. Angrist and Krueger (1991) pioneered this approach in the investigation of the relationship between earnings, educational attainment, and school regulation in the United States, where school regulation stipulates a minimum age at graduation that differs over time and across American States. In such a context children born in the first four months of the year will have received less education if they drop out of school when they turn 16, so in the adulthood they will receive a lower wage. The study by Angrist and Krueger stimulated several follow-up investigations: Bound and Jaeger (1996) provide evidence from cohorts predating the compulsory schooling laws that the link between season of birth and educational and labour market success can be at least partially explained by factors other than schooling laws. The Swedish school enrolment rules make Sweden a suitable subject for using birth-month-induced variation in the timing of education and age of graduation as a natural experiment. In fact Swedish students are subject lo laws on the age of school entry and graduation. A normal Swedish school year starts at the end of August and lasts until the beginning of June the next year. Primary school starts for almost all children the year they turn 7, lasts for nine years and is finished in June, the calendar year the pupils turn 16. Graduation at younger ages is impossible, and graduation at older ages is rare. The school entry cut-off-date mechanism means that those born in January enter school 11 months later than those born in the previous December. In their investigation, Skirbekk, Empirical analysis of I.D.E.A. data Using individuals belonging to two different cohorts, precisely 1966-1971 and 1976-1981, the central focus of the present investigation explores whether a different month of birth leads to regular and relevant differences in the life decisions of Italian people. In order to settle this question, it is employed the natural experiment approach and it is applied the same strategy followed by Skirbekk, Kohler and Prskawetz: the assumption that parents cannot time the births of their children very accurately to the exact month is an universal rule and it is, of course, shared by both the Italian and the Sweden case. Hypotheses In the present work the effect of the month of birth on several outcomes that relate to "positive" events in adult life as it was made with a sample of Swedish women in 2003 are investigated. These variables include educational attainment, marriage and the first birth. The low cohabitation experience performed by the Italians with respect to the higher tendency experienced by the Swedish induces to think about a profoundly different socio economic background between the two countries: Italy is a country traditionally based on marriage and