Working Paper: NBER ID: w3177
Authors: Naci H. Mocan
Abstract: Using recent developments in time-series econometrics, this paper investigates the behavior of fertility over the business cycle. The sex-specific unemployment rates, the divorce rate and the fertility rate are shown to be governed by stochastic trends. Furthermore, fertility is determined to be co-integrated with the divorce and unemployment rates. In the bivariate vector-autoregressions between fertility and unemployment, an increase in the female or male unemployment rates generate a decrease in fertility, which confirms the findings of previous time-series research concerning the procyclical behavior of fertility. However, when the models include the divorce rate and the proportion of young marriages as additional regressors, shocks to the unemployment rates bring about an increase in fertility, implying the countercyclicality of fertility.
Keywords: fertility; business cycles; unemployment; divorce; vector autoregression
JEL Codes: E32; J13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| unemployment rates (J64) | fertility (J13) |
| divorce rate (J12) | fertility (J13) |
| proportion of young marriages (J12) | fertility (J13) |