Baby Busts and Baby Booms: The Fertility Response to Shocks in Dynastic Models
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.
The authors thank the National Science Foundation, Grant SES-0962432, and the ESRC Centre for Population Change for financial support. We also thank Michele Boldrin, V.V. Chari, Simona Cociuba, Martin Gervais, David Hacker, John Knowles, Ellen McGrattan, Thomas Sargent, Henry Siu, Michele Tertilt for helpful comments. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Larry Jones & Alice Schoonbrodt, 2016. "Baby Busts and Baby Booms: The Fertility Response to Shocks in Dynastic Models," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 20, pages 157-178, October. citation courtesy of