Working Paper: NBER ID: w8984
Authors: Charles F. Manski; Joram Mayshar
Abstract: Whereas most of the world has experienced decreasing fertility during the past half century, Israel has experienced a puzzling mix of trends. Completed fertility has decreased sharply in some ethnic-religious groups (Mizrahi Jews and non-Bedouin Arabs) and increased moderately in other groups (non-ultra-orthodox Ashkenazi and Israeli-born Jews). In a phenomenon that can only be described as a reverse fertility transition, fertility has increased substantially (from about 3 to 6 children per women) among ultra-orthodox Ashkenazi and Israeli-born Jews. This paper explores how private and social incentives for fertility may have combined to produce the complex pattern of fertility in Israel. Theoretical analysis of the social dynamics of fertility shows that this pattern could have been generated by the joint effects of (a) private preferences for childbearing, (b) preferences for conformity to group fertility norms, and (c) the major child-allowance program introduced by the Israeli government in the 1970s. Econometric analysis of fertility decisions shows that fundamental identification problems make it difficult to infer the actual Israeli fertility process from data on completed fertility. Hence we are able to conjecture meaningfully on what may have happened, but we cannot definitively resolve the Israeli fertility puzzles.
Keywords: fertility; child allowances; social incentives; Israel
JEL Codes: J1; H2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| private preferences for childbearing + preferences for conformity to social norms (J13) | fertility decisions (J13) |
| child allowance program in the 1970s (I38) | increase in fertility among ultraorthodox Ashkenazi and Israeli-born Jews (J13) |
| private preferences for childbearing + preferences for conformity to social norms (J13) | reverse fertility transition in certain populations (J13) |
| child allowance policies (J13) | fertility trends (J11) |