Discussion paper

DP13374 Economic Uncertainty and Fertility Cycles: The Case of the Post-WWII Baby Boom

Using the US Census waves 1940-1990 and Current Population Surveys 1990-2010, we look at how economic uncertainty affected fertility cycles over the course of the XXth century. We use cross-state and cross-cohort variation in the volatility of income growth to identify the causal link running from uncertainty to completed fertility. We find that economic uncertainty has a large and robust negative effect on fertility. This finding contributes to the unraveling of the determinants of the post-WWII baby boom. Specifically, the difference in economic uncertainty endured by women born in 1910 compared to that faced by women born in 1935 accounts for between 45% and 61% of the one child variation across these cohorts. We hypothesize that a greater economic uncertainty increases the risk of large consumption swings, which individuals mitigate by marrying later, postponing fertility, and ultimately decreasing their completed fertility.

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Citation

Chabe-Ferret, B and P Gobbi (2018), ‘DP13374 Economic Uncertainty and Fertility Cycles: The Case of the Post-WWII Baby Boom‘, CEPR Discussion Paper No. 13374. CEPR Press, Paris & London. https://cepr.org/publications/dp13374