The Economics of Fertility Timing: An Euler Equation Approach

30 Pages Posted: 2 Aug 2014

See all articles by David Canning

David Canning

Harvard University - T.H. Chan School of Public Health

Declan French

Queen's University Management School

Michael Moore

University of Warwick - Warwick Business School

Date Written: July 31, 2014

Abstract

We develop a dynamic model of fertility, female labor supply and consumption to explain birth timing, particularly why more educated women delay fertility longer. We express the birth timing decision in an Euler equation framework by treating the probability of fertility each period as a continuous choice variable with actual fertility being a random outcome given this probability. Within this framework, it is easy to see the effects of economic forces on fertility timing decisions. Using US data we show that more highly educated women delay fertility to later ages because they can accrue greater benefits from work experience.

Keywords: births, female labor supply, optimization

JEL Classification: J13, J31

Suggested Citation

Canning, David and French, Declan and Moore, Michael John, The Economics of Fertility Timing: An Euler Equation Approach (July 31, 2014). Available at SSRN: https://ssrn.com/abstract=2474641 or http://dx.doi.org/10.2139/ssrn.2474641

David Canning

Harvard University - T.H. Chan School of Public Health ( email )

677 Huntington Avenue
Boston, MA MA 02115
United States

Declan French (Contact Author)

Queen's University Management School ( email )

185 Stranmillis Road
Belfast, Northern Ireland BT9 5EE
United Kingdom

Michael John Moore

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

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