The Impact of Economic, Technological and Demographic Factors on Aggregate Births

Abstract

HIS study is an econometric investigation T of the economic and demographic determinants of aggregate births in the post-war history of the United States. Prior studies have focused on the endogenous character of demographic variables; but, unfortunately, with the partial exception of Gary Becker (1960) they have failed to recognize the dynamic flavor of the problem. Indeed, issues associated with adjustment, timing, interaction between flows and stocks and depreciation rates are for the most part ignored. On the other hand, the existing econometric effort does not lend its support to a unique hypothesis in regard to the qualitative characteristics of the relation of births with various economic variables. Indeed, Richard and Nancy Ruggles' (1960) study of cross-section data failed to reveal a unique relationship between size of family and socio-economic status; the same problem but on a different plane has appeared in studies of time series by Becker (1960),Thomas (1960, 1927) and others (Kirk (1960), Silver (1965)) who have produced conflicting results between cyclical and secular association of fertility and business economic activity. This apparent inconsistency has generated some doubts concerning Becker's hypothesis that children can be treated as a class of consumer durables and that a traditional demand function can be used to explain births' behavior. From the above considerations it is therefore desirable that further progress be sought in the development of econometric models which integrate the dynamic aspects of both demographic and economic mechanisms. This is the intention of the present study. To this end we shall make use of a model of simultaneous equations which will allow us to consider, in a systematic fashion, the questions of timing, adjustment process, and the interaction of flows and stocks.