Economics Meet Psychology, Psychology Meet Economics

Why do women postpone childbearing? Why are birth rates in much of the developed world so low? Is it enough to say that work and lifestyle take precedence? If we want to encourage women to have more children, or to have them when they are younger, wouldn't it be a good idea to know more about the women themselves, not just their demographic profile, but what they think about having children, what pressures they feel to have – or not to have – children, and whether, if they did have a child (or another child) they believe they can support the child and raise him or her well. And how do these thoughts, feelings and emotions change over time, in response in changes to the economy, government and workplace policy, personal and family situation? Until now, most research on significant life path decisions such as child bearing – but also, deciding to retire, or to marry or to leave the family home to live independently – has looked for economic and societal explanations of change. Using large-scale databases, econometricians and demographers have identified long-term shifts in the timing of life events and characterized changes in priorities for work, family, income, lifestyle. By comparing countries with different economic and social policies, they have been able to identify clues to why changes might occur and thus the types of economic and social policy interventions that might influence decisions and behavior. But is this the best (or even the easiest) way to understand decisions and behavior? What about asking psychologists, who deal with thoughts ("cognizance"), feelings, emotions, decisions and behavior as their stock in trade? At Dondena, that is just what we are doing in several projects, including the European Commission Seventh Research Framework Program (FP7), funded collaborative projects REPRO (Reproductive decision-making in a macro-micro perspective) and GGP (Gender and Generations Project). In these projects, we still use large-scale databases, but they contain data about people's cognizance, feelings, emotions and plans, as well as their work, family, income and life situation. With colleagues from leading European and international research centers, we are exploring psychological explanations of life path decisions and work-related behavior (micro-level explanations). We use new statistical modelling techniques to link them to potential macro-level explanations and changes in macro-level factors over time.

What have we discovered so far? We can start with the obvious: people's thoughts and emotions do influence their decisions about significant changes to their own work and family situations. Beyond that, though, we are still exploring new ground. It seems fair to assume that differences in economic and social policy, as well as differences in organizational policy and practice will influence the personal thoughts and emotions that, in turn, affect individual life path decisions that, in turn, affect the employment market, economy and society. But, what is the precise nature of these relationships? What differences are there between work and family decisions? How will knowledge of the relationship between macro conditions, specific thoughts and emotions, and decisions and behaviors help formulate policy and contribute to social and economic development? At Dondena, we hope to come closer to answering these questions with our research.