Working Paper: NBER ID: w17157
Authors: Melissa Schettini Kearney; Phillip B. Levine
Abstract: Using individual-level data from the United States and a number of other developed countries, we empirically investigate the role of income inequality in determining rates of early, non-marital childbearing among low socioeconomic status (SES) women. We present robust evidence that low SES women are more likely to give birth at a young age and outside of marriage when they live in more unequal places, all else held constant. Our results suggest that inequality itself, as opposed to other correlated geographic factors, drives this relationship. We calculate that differences in the level of inequality are able to explain a sizeable share of the geographic variation in teen fertility rates both across U.S. states and across developed countries. We propose a model of economic "despair" that facilitates the interpretation of our results. It reinterprets the sociological and ethnographic literature that emphasizes the role of economic marginalization and hopelessness into a parsimonious framework that captures the concept of "despair" with an individual's perception of economic success. Our empirical results are consistent with the idea that income inequality heightens a sense of economic despair among those at the bottom of the distribution.
Keywords: Income Inequality; Nonmarital Childbearing; Economic Despair
JEL Codes: I3; J1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Income Inequality (D31) | Early Nonmarital Childbearing (J12) |
| Low Socioeconomic Status (SES) (I32) | Early Nonmarital Childbearing (J12) |
| High Inequality Areas (I32) | Decreased Likelihood of Abortion (J13) |
| Decreased Likelihood of Abortion (J13) | Early Nonmarital Childbearing (J12) |
| Income Inequality (D31) | Economic Hopelessness (E66) |
| Economic Hopelessness (E66) | Early Nonmarital Childbearing (J12) |