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An Interesting New Trend in Fertility

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Borjas Blog, August 7, 2007

The modern economic theory of fertility dates back to the work of Gary Becker and Jacob Mincer in the early 1960s. They stressed that fertility responds both to changes in a household’s income as well as to changes in the “price” of having more children. Mincer, in particular, emphasized these price effects, arguing that the number of children a family would have would fall as women’s wages rise. The intuition is obvious: a rise in the mother’s wage makes having children more expensive.

This framework, with some minor tweaks, is often used to explain why fertility falls as a country becomes richer. As the country’s per-capita income rises, the additional wealth would encourage families to have more children — but the higher price of a woman’s time would encourage families to have fewer children. The traditional assumption (supported by data) was that the price effect outweighs the income effect.

But there are a few signs that we may need to rethink some of these ideas. This is from a recent NPR report:

The newest status symbol for the nation’s most affluent families is fast becoming a big brood of kids.

Historically, the country-club set has had the smallest number of kids. But in the past 10 years, the number of high-end earners who are having three or more kids has shot up nearly 30 percent.”

Some say the trend is driven by a generation of over-achieving career women who have quit work and transferred all of their competitive energy to baby making.

They call it “competitive birthing.”

I don’t know if the rise in the number of children among more affluent families is due to “competitive birthing” or not. But the data, and many anecdotal observations, clearly suggest that there’s something going on.

It is not unusual, for instance, to find families in the Boston suburbs where the mother has an advanced academic degree, obviously can earn a high wage in the labor market, but has instead decided to be a stay-at-home mom for a brood of 3 or 4 children. I would not classify these families as part of the “country-club set.” These families are often making a substantial financial sacrifice.

Some interesting questions: Why does the high price of a woman’s time seem to be less of a deterrent to having more children these days? And is this only a U.S. phenomenon?

[Read the orgininal NPR story here.]

Original article

(Posted on August 15, 2007)

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