Lifetime Fertility Objectives And Economic Analysis Of The Age Pattern Of Childbearing.

Abstract

A persistent problem in the economic analysis of childbearing behavior has been that of distinguishing differences in the age pattern of fertility from those in the overall level as reflected by actual or desired completed fertility. Understanding the full implications of exogenous changes in female wage rates for fertility patterns requires progress in this area. The approach taken in this dissertation is both theoretical and empirical. Using the economic theory of rationing, a new decomposition of the comparative static change in age-specific cumulative fertility is derived. This decomposition distinguishes pure timing changes from those that are associated with a change in completed fertility, and can be used to analyze the extent to which variations in the parameters of the life cycle budget constraint influence the timing and level of fertility as separate dimensions of childbearing activity. To apply the theoretical decomposition an empirical model of life cycle fertility and labor force participation is developed and estimated on data from the ninth wave of the Panel Study of Income Dynamics. The model that emerges is one of simultaneous limited dependent variables, as we account for women who have completed childbearing through the use of data on desired completed fertility. The structural model allows us to distinguish the age pattern of fertility for working and non-working women. We find that although wage rates and cumulative fertility are negatively related in general, increase in wage rates over the life cycle contribute to an acceleration of childbearing activity. The empirical results also indicate that the higher fertility of blacks can be explained almost entirely by differences in wage rates, and that the negative impact on fertility of increasing education for all women is likewise due to the resulting wage differentials.