Highly Educated Women Are Having More Children
Demographers have long reported that as women join the market economy and move up the income curve, they have fewer and fewer children. This appears to be changing. A new study in the Economic Journal looks at U.S. fertility trends and finds U-shaped fertility rates based on the educational levels of women. Specifically, the researchers report that highly educated American women are earning enough money to outsource child-rearing and domestic chores. Since they can earn more in the market than it costs to pay for child-rearing and housecleaning, they are choosing to have more children. How does this work? From the study:
Marketization, however, affects the price for quantity that parents face. For parents with low levels of human capital, (i.e., low income), marketization is low and thus the parents themselves engage in most of the child-raising. … In contrast, parents with high levels of human capital optimally outsource a major part of their child-raising, which, in turn, reduces the cost of children from the parents' point of view. We show that this reduction can be sufficiently large to induce an increase in fertility above a certain level of human capital.
In our basic model, parental time spent on raising children decreases with parents' human capital. This occurs because the fraction of income allocated to raising children decreases with the parents' human capital while parental reliance on market substitutes increases with human capital…
Our model demonstrates how parents can substitute their own parenting time for market-purchased childcare. We show that highly educated women substitute a significant part of their own parenting with childcare. This enables them to have more children and work longer hours.
For more background on this phenomenon, see also my 2009, "Demographic Transition Reverses: Are the Wealthy Having More Kids?"
