Earlier this year, Melissa Kearney and Phillip Levine released an NBER Working Paper on the economics of fertility in high-income countries. In part, this paper is a follow-up on their 2022 article on cohort effects and fertility (which I discussed here), as well as building on this theoretical and empirical review (ungated here) by Doepke et al. (which I discussed here).
Kearney and Levine first review the trends and patterns in fertility in high-income countries, focused in particular on cohort-based measures. This exercise re-establishes the by now well-known trend of declining fertility, across the six example countries that they selected (Canada, Japan, Netherlands, Norway, Portugal, and the US).
Kearney and Levine then turn their attention to why fertility has declined, as well as why various policies and incentives have mostly failed to arrest the declining fertility trends. Taking an economic perspective that builds from Gary Becker's work on the economics of the family, but broadens its consideration (as shown by Doepke et al.), Kearney and Levine state that:
...the evidence points us to the view that the recent decline in fertility is likely less about changes in current constraints and more about cumulative cultural and economic forces that influence fertility decisions over time. Generally, economists are loathe to rely on changes in preferences to explain behavior because that can explain virtually anything. But there are reasons to believe that the lifestyle, broadly defined, that is consistent with having a child or multiple children is becoming less desirable for many adults.
Kearney and Levine point out several times (as in the quote above) how much economists dislike resorting to changes in preferences as an explanation, because changes in preferences can be used to explain essentially anything (which renders models basically worthless). However, they acknowledge that in this context, and based on the evidence from many studies, that it is likely that "shifting priorities" (a convenient alternative name for changing preferences) are at play. These "shifting priorities":
...refer broadly to changes in individual values, which potentially reflect evolving opportunities and constraints, changing norms and expectations about work, parenting, and gender roles, and social and cultural factors.
However, Kearney and Levine still want to avoid letting changes in preferences take over. That leads them to note that:
...changes in preferences may not be generated randomly and it is important to consider the forces that might have led to such changes. In our review of empirical evidence below, we highlight a number of potential social and cultural factors that might have altered preferences for and attitudes toward childbearing in recent decades, including peer effects, media and social media influences, the role of religion and religious messaging, and changing norms around parenting and gender roles in the home and society.
For me, the key contributions of the paper are not the review sections, but the theoretical and empirical implications. For example, in terms of theory, Kearney and Levine suggest that economic modelling of family decisions needs to change. Specifically:
We propose that it is now more appropriate to consider and model labor force participation as the default option, and fertility as the discretionary activity. This reflects a major shift in societal norms and practices over the past several decades. Women in earlier cohorts were more likely to have children and less likely to work. Back then, it is reasonable to consider having children as a widespread priority for women, perhaps reflecting societal norms and expectations, and sustained participation in the paid labor force as the more “optional” choice.
That presumptive ranking quite possibly has reversed. If market work is now the norm, the labor market norms and practices, including the expectations of “greedy jobs” as described by Goldin (2014), may alter fertility behavior. The tradeoff between market work and childbearing is now about the tension between a lifetime career and the way motherhood interrupts or alters that lifetime career progression, rather than about whether women work at all after they are married or have had their first child.
In terms of empirical implications, Kearney and Levine note that economists could learn a lot from demographers, in particular in relation to recognising cohort effects. They also note that:
...a challenge for economic research going forward is that the empirical methods we often rely on for causal identification are not particularly well-suited for studying changes across cohorts, nor the impact of widespread social and cultural changes... The statistical demands on the data for causal identification often lead to a focus on the immediate impact of period-specific factors. But as noted throughout this paper, the key questions that remain to be answered in this area are about cohort-level changes and the role of less immediate and discrete changes.
In addition, a typical approach to identifying period-specific effects might generate misleading or limited policy lessons. Consider an intervention that relaxes some constraints on having a child at a point-in-time. Younger women—say, 18-year-olds—may incorporate that change into their long-term decision making, but they may not respond immediately. Meanwhile, women in their early 30s may be less responsive, having already made many related life choices (regarding careers, relationships, lifestyle, etc.). In such cases, we might observe little to no immediate effect, even if the policy ultimately influences lifetime fertility...
A policy change may lead women to move up the timing of a birth to respond to some incentive, but to have the same number of children over their childbearing years. Our methods may conclude that this policy “worked,” even though completed fertility was unaffected.
It is important for economists to recognise where the current widely used empirical methods are likely to lead to incorrect conclusions being drawn, and Kearney and Levine have provided some important cautions here. Fertility decline is topical, and many economists will be working on research questions related to this, especially as policy initiatives are rolled out by governments trying to return to above-replacement fertility. This review by Kearney and Levine is both timely and very helpful.
[HT: Marginal Revolution]
Read more:
No comments:
Post a Comment