Abstract
Using unemployment rates as the sole labor market explanatory variable, most previous studies have concluded that employment conditions do not systematically influence teen birth rates. By contrast, this study found that birth rates were positively correlated with male employment rates (20–24 years old) and negatively correlated with the real minimum wage. Teen birth rates were also positively correlated with teen gonorrhea infection rates; and for the older teens (18–19 years old), by a measure of illegal drug use. By contrast, alcohol use was negatively correlated with teen birth rates. Finally, teen female employment rates were positively correlated with teen birth rates in weak labor market areas, suggesting that better job opportunities might increase teen birth rates among disadvantaged youth. Given the persistence of young adult birth rates among disadvantaged youth, policy recommendations to eliminate the marriage penalty they face are offered.
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Notes
We calculated the correlation coefficients between the three measures of labor market conditions across 33 states. The correlation coefficients range from 0.44 to 0.55 in absolute values. We further estimated the variance inflation factor (VIF) from the regression of the teen birth rates on the three measures of labor market conditions, and obtained the mean VIF = 1.89 for 33 states, and the mean VIF = 2.17 for 26 states. Therefore, both confirmed the small chance of multicollinearity problems among the three measures of labor market conditions.
We also tested to see if the unemployment rate—teen birth rate relationship was nonlinear. However, the unemployment rate squared term was not significant in any of the specifications so we did not include it in our model.
SAMSHA also reports alcohol binge rates. We found, however, that the alcohol use rate was a more accurate predictor so we used it rather than the binge rate.
State-level measures of access to abortion clinics were available for only 4 years of the 10 years in our study. Since there was little year-to-year variation in this measure, when we tested those years, there was no statistically significant link to the state level variations in teen pregnancy rates.
Fixed effects and random effects models are the two popular methodologies to conduct panel data analysis in the literature. We ran a Hausman test which confirmed that fixed effects model is preferred in our study.
Levine (2000) had the same problem. Due to missing data, he was only able to include individuals from 28 states in his study and only had complete data for all four years for 11 states. It was also a problem for Kearney and Levine (2012b, Table 3) when they wanted to test the link between sexual behavior and teen birth rates where they only had 167 observations over the 17 year period 1991–2008; or about ten states per year.
In a subsequent revision made in December 2013, Kearney and Levine (2012c) found a statistically significant inverse relationship between unemployment and teen birth rates.
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Cherry, R., Wang, C. Labor Market Conditions and US Teen Birth Rates, 2001–2009. J Fam Econ Iss 36, 408–420 (2015). https://doi.org/10.1007/s10834-014-9402-7
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DOI: https://doi.org/10.1007/s10834-014-9402-7