Saturday, August 8, 2009

Fertility and economic cycles

An article in the Times discusses fertility during the recession, finding that it may have fallen. In theory, there are two competing effects that may be countervailing. For any couple, the recession probably brought about a drop in the male's income, which should translate into a pure negative income effect on optimal family size, reducing it. But the female's market earnings probably also fell, which has an ambiguous effect. Kids cost the mom's time in addition to costing money, and it isn't immediately clear which way the effect should naturally wash out.