Life-Cycle Fertility: Means vs. Motives vs. Opportunities

In this paper I study life-cycle fertility patterns and the cross sectional distribution of births in the U.S. I focus my attention on the fact that more educated individuals have

fewer children and have them later in life than their less educated counterparts. To understand the data, I propose a theory in which a standard model of fertility is embedded into a realistic life-cycle, consumption-savings framework with imperfect capital markets and stochastic fertility. My approach then tries to assess whether standard theories

of fertility can accommodate cross-sectional and life-cycle variation in the data. I show that fertility risk has a first order effect on the level and the timing of births.

By fertility risk I mean both: (i) early in life, women with different educational attainments have different levels of success when carrying out childbearing plans and (ii) biological constraints affect fertility decisions later in life. I estimate the extent of these risks using individual data on abortions and unplanned pregnancies. From the exercise, I conclude that standard theories used in macroeconomics to understand the time-series dimension of the data (e.g., the demographic transition) don’t impose

enough structure to account for cross-sectional variation nor life-cycle fertility facts. Thus, my model reassesses the usefulness of such theories and extends them by introducing imperfect control of stochastic fertility.

For more information, contact Dirk Krueger.