Privatization and the Postsocialist Fertility Decline

The ten countries with the fastest shrinking population are all located in Eastern Europe, with low fertility as one of the leading causes. In this article, we analyze the privatization of companies as a potential but so far neglected factor behind the postsocialist fertility decline. We argue that privatization is linked to lower fertility by catalyzing uncertainty, shifting the cost of care work onto families, and reducing the resources available to support social reproduction. We test this hypothesis using a novel database comprising information on the demographic and enterprise trajectories of 52 Hungarian towns between 1989-2006 and a cross-country dataset of 28 countries in Eastern Europe. We fit fixed and random-effects models adjusting for potential confounding factors and control for time-variant factors and common trends. We find that company privatization is significantly associated with the postsocialist fertility decline. The observed level of privatization among Hungarian towns corresponds to 0.37 fewer childbirths per woman on average, i.e., approximately 54.3% of the overall fertility decline. Cross-country fixed effects models covering 28 former socialist-bloc countries for the 1989-2012 period confirm the town-level findings. The observed level of privatization among postsocialist countries might explain approximately 49.75% of the overall fertility decline