Easterlin revisited: Relative income and the baby boom

Matthew J. Hill

Explorations in Economic History, 2015, vol. 56, issue C, 71-85

Abstract: This paper reexamines the first viable and a still leading explanation for mid-twentieth century baby booms: Richard Easterlin's relative income hypothesis. He suggested that when incomes are higher than material aspirations (formed in childhood), birth rates would rise. This paper uses microeconomic data to formulate a measure of an individual's relative income. The use of microeconomic data allows the researcher to control for both state fixed effects and cohort fixed effects, both have been absent in previous examinations of Easterlin's hypothesis. The results of the empirical analysis are consistent with Easterlin's assertion that relative income influenced fertility decisions, although the effect operates only through childhood income. When the estimated effects are contextualized, they explain 12% of the U.S. baby boom.

Keywords: Easterlin; Baby boom; Relative income; Fertility (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:exehis:v:56:y:2015:i:c:p:71-85

DOI: 10.1016/j.eeh.2014.10.001

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