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Research project

Aggregate effects of the egg-freezing technology and policy implications

Assisted reproductive techniques (ARTs) such as in-vitro fertilization (IVF) are increasingly becoming standard elements of fertility decisions, circumventing infertility constraints generated by delayed childbearing or biological characteristics of the couple. To date, the literature on the effects of assisted reproductive technologies on labour supply and fertility is scarce. This project aims to increase that body of knowledge by incorporating novel variables to assess aggregate outcomes.

Funded by the Deutsche Forschungsgemeinschaft (DFG, German Research Foundation)

In Denmark, where the first three IVF treatments are subsidized, about 5% of all children were born after IVF in 2009. With new technological developments, women can freeze their eggs for future use to increase the chances of a life-birth after an IVF procedure. According to the Danish health authority, a total of 39,974 fertility treatments were undertaken in Denmark in 2019 (CPH Post Online 2021). These treatments lead to 7,465 pregnancies, 2,260 of which used frozen eggs (a fourfold increase compared to 2013).

Similar increases are documented for the US, UK or Australia. Firms increasingly offer egg freezing as a wage perk of an employment contract. For example, 5%, 13%, respectively 17% of all American companies with more than 500, 5.000, and 20.000 employees, respectively, offer egg freezing as a benefit to female employees (Mercer, 2019; IVF Babble, 2021).

The first objective of this research project is to characterize the demand of women for egg freezing and later IVF treatment in a life-cycle model with endogenous education, labour market participation and fertility. We will use a calibrated version of this model to investigate how the demand for egg freezing changes if its cost is entirely subsidized ─ as in Denmark, for example ─ and how this affects outcomes over the life cycle.

Secondly, we will bring in the firm’s perspective and model the motives for firms to offer egg freezing as a work perk of the optimal labour contract. The egg freezing technology provides insurance and at the same time enables firms to extract private information about the women’s preferences for children. We will bring together women and firms in a labour market matching model to characterize the optimal employment contract. Our model will provide an argument for why it may be optimal for females to reveal through the adoption of the egg freezing technology, at least partially, their unobserved preferences for children to firms as well as their willingness to delay child birth. Both public policy subsidizing egg-freezing and firms offering egg freezing as a work perk may have interesting effects on the gender wage gap, the effects of children on wages and on completed fertility.

In order to calibrate our model, we will, as a (subsidiary) third objective, conduct empirical analyses on the basis of Danish registry data in order to measure success probabilities of IVF treatments (with and without prior egg freezing). We will complement this data analysis by a survey to measure subjective expectations of females and their preferences for fertility and ARTs.

Our work most directly relates to the macroeconomic literature on family economics that structurally models female labour supply and fertility decisions. Additionally, this research will make a novel contribution by incorporating firm decision making in order to evaluate the optimal contractual arrangements that incorporate the possibility of egg freezing and IVF for working women. Ultimately, we focus not only on individual (household/firm) outcomes, but also on aggregate outcomes, such as total fertility rates and educational composition of the female labour force, in order to incorporate an assessment of the sustainability of the welfare social-security system in an aging population as part of our analysis.

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