Abstract
This study is the first to investigate the economic factors behind the recent rise of the one-child family in the United States. Using longitudinal data from the Panel Study of Income Dynamics (PSID) that runs from 1968 to 2013 and a variety of different model specifications with state and year fixed effect, including logistic regression, linear probability, and Cox proportional hazard models, the study examined the effect of absolute income volatility on the decision of having an only-child family. The study found that an increase in the standard deviation of income is associated with a decrease in the probability of having a second child for mothers who are in the second quartile of income distribution.
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Notes
According to the Social Security Office of Retirement and Disability Policy (ORDP), in 2035, there will only be enough taxes to pay for 75% of scheduled benefits. The ORDP attributes this imbalance to the drop in the birth rate from 3 to 2 children per woman rather than increasing lifespans. This decrease in the birth rate, if left unchecked, will change the age structure of the US over time. Eventually, it will leave the society with insufficient tax payers to cover the pension and benefits for the retirees who will be collecting social security.
According to the Pew Research Center, the percentage of childless women has increased from 10% in the 1970s to 15% in 2014 while mothers with one child has increased from 10 to 18%. Mothers with two children have increased from 22 to 35%. Mothers with three and four children have decreased from 23 to 20% and from 36 to 12%, respectively.
Becker (1960) stated the following: “An increase in income must increase the amount spent on the average good, but not necessarily that spent on each good. The major exceptions are goods that are inferior members of a broader class, as a Chevrolet is considered an inferior car, margarine an inferior spread, and black bread an inferior bread. Since children do not appear to be inferior members of any broader class, it is likely that a rise in long-run income would increase the amount spent on children” (p. 210).
According to PSID terminology, a Head is designated as a husband in the family unit or a cohabitant with whom the woman has been living for at least 1 year.
All dollar values are in US currency.
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Fady Mansour declares that he has no conflict of interest.
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I am indebted to Professors Charles Baum and Michael Roach at Middle Tennessee State University for helpful comments, and would like to thank Professors Joachim Zietz and Jason M. Debacker for comments on an earlier draft.
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Mansour, F. Economic Insecurity and Fertility: Does Income Volatility Impact the Decision to Remain a One-Child Family?. J Fam Econ Iss 39, 243–257 (2018). https://doi.org/10.1007/s10834-017-9559-y
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DOI: https://doi.org/10.1007/s10834-017-9559-y