Working Paper: NBER ID: w3133
Authors: James J. Heckman; James R. Walker
Abstract: This article demonstrates the value of microdata for understanding the effect of wages on life cycle fertility dynamics. Conventional estimates of neoclassical economic fertility models obtained from linear aggregate time series regressions are widely criticized for being nonrobust when adjusted for serial correlation. Moreover, the forecasting power of these aggregative neoclassical models has been shown to be inferior when compared with conventional time series models that assign no role to wages. This article demonstrates, that when neoclassical models of fertility are estimated on microdata using methods that incorporate key demographic restrictions and when they are properly aggregated, they have considerable forecasting power.
Keywords: fertility; wages; microdata; neoclassical models
JEL Codes: J13; C53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| higher female wages (J31) | fewer births (J19) |
| higher female wages (J31) | postponement of births (J13) |
| higher male income (J31) | increase in the number of births (J13) |
| higher male income (J31) | closer spacing between births (J13) |