Employment trends ofyoung mothers and the opportunity cost of babies in the United States

Abstract

The central concept of microeconomic theories of fertility is opportunity cost—the product of wife’s employment lost due to childbearing and the value of her employment. This paper presents a model for analyzing opportunity cost using panel data. The average loss of employment attributable to a second- or higher-order birth, calculated at around age 2, is over 400 hours per year. This time cost represents an income loss of about $1050 in 1969 dollars. Time cost is independent of such demographic factors as birth order and age of oldest sibling. Neither does time cost depend on husband’s wage rate or wife’s education or potential wage rate. This indicates that many microeconomic models of fertility have been seriously misspecified. The paper also compares results from static and dynamic models, explores possible problems due to simultaneity bias, investigates the relationship between changes in employment (including time cost) and initial employment level, and identifies the difficulties of theorizing about opportunity cost.

This is a preview of subscription content, access via your institution.

References

  1. Bahr, S. J. 1974. Effects on Power and Division of Labor in the Family. Pp.167–185 in Lois W. Hoffman and F. I. Nye (eds.), Working Mothers. San Francisco: Jossey-Bass.

    Google Scholar 

  2. Becker, Gary S. 1975. Human Capital. (Second edition.) New York: National Bureau of Economic Research.

    Google Scholar 

  3. Berelson, B. 1976. Social Science Research on Population: A Review. Population and Development Review 2:219–266.

    Article  Google Scholar 

  4. Bowen, William G., and T. Aldrich Finegan. 1969. The Economics of Labor Force Participation. Princeton: Princeton University Press.

    Google Scholar 

  5. Cain, G. 1971. Issues in the Economics of a Population Policy for the United States. American Economic Review 61:408–417.

    Google Scholar 

  6. —, and A. Weininger. 1973. Economic Determinants of Fertility: Results from Cross-Sectional Aggregate Data. Demography 10:205–223.

    Article  Google Scholar 

  7. Coleman, James S. 1968. The Mathematical Study of Change. Pp.428–478 in Hubert M. Blalock and Anne Blalock (eds.), Methodology in Social Research. New York: McGraw-Hill.

    Google Scholar 

  8. De Tray, D. N. 1973. Child Quality and the Demand for Children. Journal of Political Economy 81:S70-S95.

    Article  Google Scholar 

  9. Dickinson, Jonathan. 1974a. Labor Supply of Family Members. Pp.177–250 in James N. Morgan (ed.), Five Thousand American Families: Patterns of Economic Progress, Vol. 1. Ann Arbor: Institute for Social Research.

    Google Scholar 

  10. — 1974b. Categorical Interactions in Linear Regression Models. Pp.365–374 in James N. Morgan (ed.), Five Thousand American Families: Patterns of Economic Progress, Vol. 1.Ann Arbor: Institute for Social Research.

    Google Scholar 

  11. Dixon, Ruth B. 1975. Women’s Rights and Fertility. Reports on Population/Family Planning No. 17. New York: The Population Council.

    Google Scholar 

  12. Easterlin, R. A. 1969. Towards a Socioeconomic Theory of Fertility: A Survey of Recent Research on Economic Factors in American Fertility. Pp. 127–156 in S. J. Behrman, Leslie Corsa, and Ronald Freedman (eds.), Fertility and Family Planning: A World View. Ann Arbor: University of Michigan Press.

    Google Scholar 

  13. Ghez, Gilbert R., and G. S. Becker. 1975. The Allocation of Time and Goods Over the Life Cycle. New York: Columbia University Press for the National Bureau of Economic Research.

    Google Scholar 

  14. Harris, Chester W. 1963. Problems in Measuring Change. Madison: University of Wisconsin Press.

    Google Scholar 

  15. Hawthorn, Geoffrey. 1970. The Sociology of Fertility. London: Collier-Macmillan.

    Google Scholar 

  16. Hibbs, D. A., Jr. 1974. Problems of Statistical Estimation and Causal Inference in Time Series Regression Models. Pp,252–308 in Herbert L. Costner (ed.), Sociological Methodology 1973–74. San Francisco: Jossey-Bass.

    Google Scholar 

  17. Hill, C. R., and F. P. Stafford. 1974. Allocation of Time to Pre-school Children and Educational Opportunity. Journal of Human Resources 9:323–341.

    Article  Google Scholar 

  18. Hout, M. 1977. A Cautionary Note on the Use of Two-Stage Least Squares. Sociological Methods and Research 5:335–345.

    Article  Google Scholar 

  19. Lansing, John B., and James N. Morgan. 1971. Economic Survey Methods. Ann Arbor: Institute for Social Research.

    Google Scholar 

  20. Leibenstein, H. 1974. An Interpretation of the Economic Theory of Fertility: Promising Path or Blind Alley? Journal of Economic Literature 12:457–479.

    Google Scholar 

  21. Michael, R. T. 1973. Education and the Derived Demand for Children. Journal of Political Economy 81:S128-S164.

    Article  Google Scholar 

  22. Morgan, James N., Katherine Dickinson, Jonathan Dickinson, Jacob Benus, and Greg Duncan. 1974. Five Thousand American Families: Patterns of Economic Progress, Vols. 1 and 2. Ann Arbor: Institute for Social Research.

    Google Scholar 

  23. Namboodiri, N. K. 1972. Some Observations on the Economic Framework for Fertility Analysis. Population Studies 26:185–206.

    Article  Google Scholar 

  24. —. 1974. Which Couples at Given Parities Expect to Have Additional Births? An Exercise in Discriminant Analysis. Demography 11:45–56.

    Article  Google Scholar 

  25. Nerlove, M. 1974. Household and Economy: Toward a New Theory of Population and Economic Growth. Journal of Political Economy 82:S200-S218.

    Article  Google Scholar 

  26. Oppenheimer, Valerie Kincade. 1970. The Female Labor Force in the United States. Berkeley: Institute of International Studies.

    Google Scholar 

  27. Rao, Potluri, and Roger L. Miller. 1971. Applied Econometrics. Belmont, California: Wadsworth.

    Google Scholar 

  28. Ryder, Norman B., and Charles F. Westoff. 1971. Reproduction in the United States, 1965. Princeton: Princeton University Press.

    Google Scholar 

  29. Scanzoni, John. 1972. Sexual Bargaining: Power Politics in the American Marriage. Englewood Cliffs: Prentice-Hall.

    Google Scholar 

  30. Schultz, T. P. 1973. A Preliminary Survey of Economic Analyses of Fertility. American Economic Review 63:71–78.

    Google Scholar 

  31. Simon, H. A. 1966. Theories of Decision-Making in Economics and Behavioral Science. Pp.1–28 in American Economic Association and Royal Economic Society, Surveys of Economic Theory, Vol. III: Resource Allocation. New York: St. Martin’s.

    Google Scholar 

  32. Sweet, J. A. 1972. Labor Force Reentry by Mothers of Young Children. Social Science Research 1:189–210.

    Article  Google Scholar 

  33. —. 1973. Women in the Labor Force. New York: Seminar.

    Google Scholar 

  34. Turchi, Boone A. 1975a. The Demand for Children: The Economics of Fertility in the United States. Cambridge: Ballinger.

    Google Scholar 

  35. —. 1975b. Microeconomic Theories of Fertility: A Critique. Social Forces 54:107–125.

    Article  Google Scholar 

  36. Willis, R. J. 1973. A New Approach to the Economic Theory of Fertility Behavior. Journal of Political Economy 81:S14-S64.

    Article  Google Scholar 

Download references

Author information

Affiliations

Authors

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Cramer, J.C. Employment trends ofyoung mothers and the opportunity cost of babies in the United States. Demography 16, 177–197 (1979). https://doi.org/10.2307/2061137

Download citation

Keywords

  • Labor Force
  • Opportunity Cost
  • Wage Rate
  • Time Cost
  • Fertility Status