E Pluribus, Pauciores (Out of Many, Fewer): Diversity and Birth Rates

Abstract

In the United States, local measures of racial and ethnic diversity are robustly associated with lower birth rates. A one standard deviation decrease in racial concentration (having people of many different races nearby) or increase in racial isolation (being from a numerically smaller race in that area) is associated with 0.064 and 0.044 fewer children, respectively, after controlling for many other drivers of birth rates. Racial isolation effects hold within an area and year, suggesting that they are not just proxies for omitted local characteristics. This pattern holds for many racial groups, is evident in different vintages of US census data (including before the Civil War), holds internationally, and persists when diversity is instrumented by immigration shocks. Diversity is associated with lower marriage rates and marrying later. These patterns are related to homophily (the tendency to marry people of the same race), as the effects are stronger in races that intermarry less and vary with sex differences in intermarriage. Similar patterns exist with income decile, though the effects are half to two-thirds smaller than race share effect. The rise in racial diversity in the US since 1970 explains between 20% and 44% of the decline in birth rates during that period.

Keywords: Diversity, Fertility, Birth Rates, Race, Homophily, Trust

JEL Classification: J11, J12, J13, J15