The Missing Factor : Variations in the Income Effect of the Female Wage on Fertility in the U.S.
Much has been made of relative earnings and their trends in the post-war U.S.: female vs. male, young vs. old. In this paper, new data are presented on recent trends in these figures, and are then put together in a model which combines both the Easterlin 'relative income' theory and the New Home Economics 'price of time' theory to explain U.S. fertility trends, female enrollment and female labor force participation for 20-24 year olds from 1969 to the present. Changes in the female wage, in combination with changes in the income of young males relative to their families' income, explain 97-99 percent of the variation of these three time series in this period--including their most recent twists. This model demonstrates that the Easterlin and New Home Economics models combine well--but that, in addition, the income effect of the female wage on fertility varies as a function of male relative income. As a result, the pattern of real wages for females will play a crucial role in determining the future path of U.S. fertility. While the amplitude of fertility changes will depend on the level of male relative income, the direction of those changes will hinge on the pattern of real wages for young females. Male relative income will play a role--but female wages will be the key.
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- Copyright: RAND Corporation
- Availability: Available
- Format: Paperback
- Pages: 85
- List Price: Free
- Document Number: DRU-286-NICHD
- Year: 1993
- Series: Drafts
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