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

Bastien Chabé-Ferret () and Paula Gobbi

No 13374, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: 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.

Keywords: baby boom; baby bust; economic uncertainty; Fertility (search for similar items in EconPapers)
JEL-codes: E32 J11 J13 N30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dem, nep-gro, nep-his, nep-lab and nep-mac
Date: 2018-12
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