The causal effect of the great recession on childlessness of white American women

Abstract

Abstract Many studies have documented a negative association between macroeconomic indicators and fertility in times of economic crisis. These studies are based on research designs that do not allow for excluding that the observed association is driven by confounders. The aim of the present paper is to estimate the causal effect of the Great Recession on cohorts’ childlessness in the United States. We apply a difference-in-difference approach to the probability of childlessness in two pseudo-cohorts of white women who entered the age of 34–36 years old being childless before the crisis, in 2004, and at the onset of the crisis, in 2007. Our identification strategy relies on the assumption that these two adjacent cohorts of women differ only because the latter cohort lived some critical years of reproductive life during the Great Recession period. We then study how many childless women aged 34–36 had a child when they were 37–39, between the years 2004 and 2007 for the control group and between the years 2007 and 2010 for the treatment group. We argue that an increase of childlessness at the age 37–39 is likely to lead to an increase in permanent childlessness, since major catch-up processes are unlikely after age 40. We replicate the analysis on two datasets: the American Community Survey and the Fertility Supplement of the Current Population Survey. Our findings suggest that the Great Recession has had a positive, though mild, effect on childlessness of white women at about the age of 40 in the US. JEL codes: Z0, J1, J110, J130, C21*