Furloughed Workers, Abortions and Fertility.

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We study the impact of economic insecurity on voluntary pregnancy terminations and fertility decisions. To do so, we exploit the temporary suspension of economic activities during the first wave of the COVID-19 pandemic in Italy as a source of plausibly exogenous variation in the economic uncertainty experienced by local labor markets. We leverage this unexpected shock to examine how uncertainty affects Voluntary Pregnancy Terminations (VPT) and fertility decisions within households. We measure the local intensity of these closures with the share of furloughed workers in each municipality, and estimate their impact on abortion and pregnancy rates using a difference-in-differences framework. Using detailed administrative data on VPTs and births, we find that — despite an overall decline in abortions due to social distancing — municipalities in the fourth quartile of the furlough distribution experienced a significant relative increase in quarterly abortion rates (10–13\% compared to the pre-pandemic mean) relative to municipalities in the lowest quartile. The effect is primarily driven by married, non-working women in households with one or two children. Moreover, the results are largely attributable to furloughed workers in the industrial sector. These findings suggest that heightened economic insecurity during the early months of the pandemic,particularly in households with children where the male partner is the sole earner,likely explains the observed increase in VPTs. Consistent with this interpretation, we detect no significant effects on births.

Keywords: Furloughed workers, Abortion, Fertility, Covid-19.

JEL Classification: I12, I18, J13, J16.