Working Paper: NBER ID: w16596
Authors: Larry E. Jones; Alice Schoonbroodt
Abstract: Economic demographers have long analyzed fertility cycles. This paper builds a foundation for these cycles in a model of fertility choice with dynastic altruism and aggregate shocks. It is shown that under reasonable parameter values, fertility is pro-cyclical and that, following a shock, fertility continues to cycle endogenously as subsequent cohorts enter retirement. Quantitatively, in the model, the Great Depression generates a large baby bust -- between 38% and 63% of that seen in the U.S. in the 1930s -- which is subsequently followed by a baby boom -- between 53% and 92% of that seen in the U.S. in the 1950s.
Keywords: fertility response; economic shocks; dynastic models; Great Depression; baby boom
JEL Codes: E13; J11; J13; O11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| fertility (J13) | economic growth (O49) |
| economic growth (O49) | fertility (J13) |
| Great Depression (G01) | fertility (J13) |
| fertility (J13) | subsequent cohorts' fertility (J11) |
| negative shock (G41) | reduced fertility (J13) |
| reduced fertility (J13) | increased fertility in subsequent generations (J13) |
| productivity shocks (O49) | fertility decisions (J13) |
| costs of raising children (J13) | elasticity of fertility (J13) |