Perceived income adequacy, the transition to parenthood and parity progression in the UK

Presenter: Ann Berrington, University of Southampton

Author: Ann Berrington

Co-author(s): Juliet Stone

Economic uncertainty can change patterns of family formation in complex and competing ways. For example, while the costs of having children may represent a barrier to childbearing if economic resources are precarious, part-time work and unemployment may increase the time available for childcare and provide opportunities for childbearing. This paper presents a novel perspective on this complexity by investigating how subjective perceptions of income adequacy (which does not necessarily reflect absolute income) can provide unique insights into the relationship between economic uncertainty and family formation. The analyses use prospective data from Waves 1-4 of Understanding Society (2009-13). We use discrete time-event history analysis to model the transition to first, second and third birth for men and women aged 16-44 years. For objective indicators of economic uncertainty (economic activity, household income) we generally observe an age-specific effect, with uncertainty associated with increased fertility at younger ages, and vice-versa at older ages. However for women of all ages, those describing their financial situation as difficult are more likely to become parents. For men, subjective financial status is significantly associated with entry into fatherhood, whereas household income is not. We conclude that perceptions of financial strain may capture aspects of economic precarity not reflected in more objective measures. This may include experiences of an insecure housing position or uncertainty over whether welfare benefits will be restricted/ withdrawn. We discuss our findings in the context of means-tested welfare assistance in the UK.