Wednesday, July 12, 2017

Fracking boom, kids, but no marriage

Melissa Kearney and Riley Wilson report the fracking boom raised the wages of less educated males and raised fertility, but marriage rates did not rise. Standard economic models of marriage and childbearing suggests that a permanent increase in male wages should raise both.

Kearney and Wilson also find that wages of less educated females rose, but not as fast as male wages. Another interesting but more implicit point is revealed by their comparison of these results, set in the modern-day economy, with those of Black et. al (2013) who examined fertility responses to the Appalachian coal boom of the 70s and 80s. Those authors looked at marital fertility only, and the results were similar to what Kearney and Wilson find.

But this juxtaposition may also be revealing for the following reason. On the one hand, a decade or two of boom might be long enough to influence long-term decision making, like having a child or marrying. But it is hard to forget how coal mining has long been mired in decline. Do young people in the booming fracking industry think the good times will last? Do they care? Anecdotally, it appears that many choose to delay marriage rather than formally forego it entirely. Is this a rational response to a temporary income shock? If it is, why does fertility respond? Do people find biological constraints more compelling?