NBER Working Papers by Alice Schoonbroodt

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Working Papers

December 2010Baby Busts and Baby Booms: The Fertility Response to Shocks in Dynastic Models
with Larry E. Jones: w16596
Economic demographers have long analyzed fertility cycles. This paper builds a foundation for these cycles in a model of fertility choice with dynastic altruism and aggregate shocks. It is shown that under reasonable parameter values, fertility is pro-cyclical and that, following a shock, fertility continues to cycle endogenously as subsequent cohorts enter retirement. Quantitatively, in the model, the Great Depression generates a large baby bust -- between 38% and 63% of that seen in the U.S. in the 1930s -- which is subsequently followed by a baby boom -- between 53% and 92% of that seen in the U.S. in the 1950s.
January 2010Who Owns Children and Does it Matter?
with Michèle Tertilt: w15663
Is there an economic rationale for pronatalist policies? In this paper we propose and analyze a particular market failure that may lead to inefficiently low equilibrium fertility and therefore to a need for government intervention. The friction we investigate is related to the ownership of children. If parents have no claim on their children’s income, then the private benefit from producing a child may be smaller than the social benefit. We present an overlapping-generations (OLG) model with fertility choice and altruism, and model ownership by introducing a minimum constraint on transfers from parents to children. Using the efficiency concepts proposed in Golosov, Jones, and Tertilt (2007), we find that whenever the transfer floor is binding, fertility choices are inefficient. We show how...
August 2008Fertility Theories: Can They Explain the Negative Fertility-Income Relationship?
with Larry E. Jones, Michèle Tertilt: w14266
In this chapter we revisit the relationship between income and fertility. There is overwhelming empirical evidence that fertility is negatively related to income in most countries at most times. Several theories have been proposed in the literature to explain this somewhat puzzling fact. The most common one is based on the opportunity cost of time being higher for individuals with higher earnings. Alternatively, people might differ in their desire to procreate and accordingly some people invest more in children and less in market-specific human capital and thus have lower earnings. We revisit these and other possible explanations. We find that these theories are not as robust as is commonly believed. That is, several special assumptions are needed to generate the negative relationship. Not...
December 2007Complements versus Substitutes and Trends in Fertility Choice in Dynastic Models
with Larry E. Jones: w13680
The Barro-Becker model is a simple intuitive model of fertility choice. In its original formulation, however, it has not been very successful at reproducing the changes in fertility choice in response to decreased mortality and increased income growth that demographers have emphasized in explaining the demographic transition. In this paper we show that this is due to an implicit assumption that number and utility of children are complements, which is a byproduct of the high intertemporal elasticity of substitution (IES) typically assumed in the fertility literature. We show that, not only is this assumption not necessary, but both the qualitative and quantitative properties of the model in terms of fertility choice change dramatically when substitutability and high curvature are assumed. T...

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