Do Credit Supply Shocks Affect Fertility Choices?
12 Pages Posted: 24 Jan 2021 Last revised: 9 Apr 2021
Date Written: December 4, 2020
We empirically investigate the role of credit supply in fertility decisions. Using the U.S. banking deregulation in the 1980s and the 2007–2009 Great Recession as two independent laboratories for the study of credit supply shocks, we find that an increase in credit supply consistently implies higher fertility rates, as well as a higher probability of giving birth. This relation, which is economically and statistically significant, differs across individuals: It is more pronounced for young women and for families with unemployed husbands. Finally, we provide suggestive evidence that increased credit access leads to more optimistic expectations about personal prospects and, in turn, higher fertility rates.
Keywords: Credit Supply, Fertility Choices, Family Economics, Banking Deregulation, Great Recession
JEL Classification: E51, J13, D10, G20, G01
Suggested Citation: Suggested Citation