IDEAS home Printed from https://ideas.repec.org/a/spr/empeco/v64y2023i3d10.1007_s00181-022-02285-7.html
   My bibliography  Save this article

The role of relative income in the share of children born out-of-wedlock in the USA

Author

Listed:
  • Georgios Mavropoulos

    (University of Macedonia)

  • Theodore Panagiotidis

    (University of Macedonia)

Abstract

This paper investigates the non-marital fertility evolution in the USA for the period between 1976 and 2016. Beyond the well-known determinants in this framework, we add and test for the Easterlin relative income hypothesis. Easterlin stresses the role of the material aspirations formed in childhood (denominator) relative to the current economic perspectives (numerator) of young men. That ratio defines the relative income. We employ panel dynamic techniques at the state level. We find a negative and statistically significant effect of the relative income in the share of children born out-of-wedlock. Most importantly, relative income is robust to the inclusion of marriage. The latter may imply a socio-economic mobility perspective.

Suggested Citation

  • Georgios Mavropoulos & Theodore Panagiotidis, 2023. "The role of relative income in the share of children born out-of-wedlock in the USA," Empirical Economics, Springer, vol. 64(3), pages 1105-1120, March.
    • Handle: RePEc:spr:empeco:v:64:y:2023:i:3:d:10.1007_s00181-022-02285-7
    DOI: 10.1007/s00181-022-02285-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00181-022-02285-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00181-022-02285-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Richard Easterlin, 1966. "On the relation of economic factors to recent and projected fertility changes," Demography, Springer;Population Association of America (PAA), vol. 3(1), pages 131-153, March.
    2. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
    3. Rafael E. De Hoyos & Vasilis Sarafidis, 2006. "Testing for cross-sectional dependence in panel-data models," Stata Journal, StataCorp LP, vol. 6(4), pages 482-496, December.
    4. Daniel Schneider & Alison Gemmill, 2016. "The Surprising Decline in the Non-Marital Fertility Rate in the United States," Population and Development Review, The Population Council, Inc., vol. 42(4), pages 627-649, December.
    5. Robert Moffitt, 1994. "Welfare Effects on Female Headship with Area Effects," Journal of Human Resources, University of Wisconsin Press, vol. 29(2), pages 621-636.
    6. Norkutė, Milda & Sarafidis, Vasilis & Yamagata, Takashi & Cui, Guowei, 2021. "Instrumental variable estimation of dynamic linear panel data models with defactored regressors and a multifactor error structure," Journal of Econometrics, Elsevier, vol. 220(2), pages 416-446.
    7. Wendy Manning & Jessica Cohen, 2015. "Teenage Cohabitation, Marriage, and Childbearing," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 34(2), pages 161-177, April.
    8. Patrick Heuveline & Jeffrey M. Timberlake & Frank F. Furstenberg, 2003. "Shifting Childrearing to Single Mothers: Results from 17 Western Countries," Population and Development Review, The Population Council, Inc., vol. 29(1), pages 47-71, March.
    9. Juan Oliva-Moreno, 2012. "Loss of labour productivity caused by disease and health problems: what is the magnitude of its effect on Spain’s Economy?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(5), pages 605-614, October.
    10. Bellido, Héctor & Molina, José Alberto & Solaz, Anne & Stancanelli, Elena, 2016. "Do children of the first marriage deter divorce?," Economic Modelling, Elsevier, vol. 55(C), pages 15-31.
    11. Jesse Wursten, 2018. "Testing for serial correlation in fixed-effects panel models," Stata Journal, StataCorp LP, vol. 18(1), pages 76-100, March.
    12. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    13. Bruno, Giovanni S.F., 2005. "Approximating the bias of the LSDV estimator for dynamic unbalanced panel data models," Economics Letters, Elsevier, vol. 87(3), pages 361-366, June.
    14. Vasilis Sarafidis & Tom Wansbeek, 2012. "Cross-Sectional Dependence in Panel Data Analysis," Econometric Reviews, Taylor & Francis Journals, vol. 31(5), pages 483-531, September.
    15. Mincer, Jacob, 1984. "Human capital and economic growth," Economics of Education Review, Elsevier, vol. 3(3), pages 195-205, June.
    16. George A. Akerlof & Janet L. Yellen & Michael L. Katz, 1996. "An Analysis of Out-of-Wedlock Childbearing in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 277-317.
    17. Bun, Maurice J. G. & Kiviet, Jan F., 2003. "On the diminishing returns of higher-order terms in asymptotic expansions of bias," Economics Letters, Elsevier, vol. 79(2), pages 145-152, May.
    18. Hill, Matthew J., 2015. "Easterlin revisited: Relative income and the baby boom," Explorations in Economic History, Elsevier, vol. 56(C), pages 71-85.
    19. Pesaran, M. Hashem & Vanessa Smith, L. & Yamagata, Takashi, 2013. "Panel unit root tests in the presence of a multifactor error structure," Journal of Econometrics, Elsevier, vol. 175(2), pages 94-115.
    20. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-1426, November.
    21. Melissa S. Kearney & Riley Wilson, 2018. "Male Earnings, Marriageable Men, and Nonmarital Fertility: Evidence from the Fracking Boom," The Review of Economics and Statistics, MIT Press, vol. 100(4), pages 678-690, October.
    22. M. Hashem Pesaran, 2021. "General diagnostic tests for cross-sectional dependence in panels," Empirical Economics, Springer, vol. 60(1), pages 13-50, January.
    23. Melissa S. Kearney & Phillip B. Levine, 2012. "Why Is the Teen Birth Rate in the United States So High and Why Does It Matter?," Journal of Economic Perspectives, American Economic Association, vol. 26(2), pages 141-163, Spring.
    24. Giovanni S. F. Bruno, 2005. "Estimation and inference in dynamic unbalanced panel-data models with a small number of individuals," Stata Journal, StataCorp LP, vol. 5(4), pages 473-500, December.
    25. Ellwood, David T. & Jencks, Christopher, 2004. "The Spread of Single-Parent Families in the United States since 1960," Working Paper Series rwp04-008, Harvard University, John F. Kennedy School of Government.
    26. Marianne Bertrand & Emir Kamenica & Jessica Pan, 2015. "Gender Identity and Relative Income within Households," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(2), pages 571-614.
    27. Irwin Garfinkel & Chien-Chung Huang & Sara S. McLanahan & Daniel S. Gaylin, 2003. "The roles of child support enforcement and welfare in non-marital childbearing," Journal of Population Economics, Springer;European Society for Population Economics, vol. 16(1), pages 55-70, February.
    28. Melissa Schettini Kearney & Phillip B. Levine, 2011. "Income Inequality and Early Non-Marital Childbearing: An Economic Exploration of the "Culture of Despair"," NBER Working Papers 17157, National Bureau of Economic Research, Inc.
    29. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    30. Benjamin Born & Jörg Breitung, 2016. "Testing for Serial Correlation in Fixed-Effects Panel Data Models," Econometric Reviews, Taylor & Francis Journals, vol. 35(7), pages 1290-1316, August.
    31. Olsen, Randall J & Farkas, George, 1990. "The Effect of Economic Opportunity and Family Background on Adolescent Cohabitation and Childbearing among Low-Income Blacks," Journal of Labor Economics, University of Chicago Press, vol. 8(3), pages 341-362, July.
    32. Diane J. Macunovich, 1998. "Fertility and the Easterlin hypothesis: An assessment of the literature," Journal of Population Economics, Springer;European Society for Population Economics, vol. 11(1), pages 53-111.
    33. Daniel Schneider & Orestes Hastings, 2015. "Socioeconomic Variation in the Effect of Economic Conditions on Marriage and Nonmarital Fertility in the United States: Evidence From the Great Recession," Demography, Springer;Population Association of America (PAA), vol. 52(6), pages 1893-1915, December.
    34. M. Hashem Pesaran, 2015. "Testing Weak Cross-Sectional Dependence in Large Panels," Econometric Reviews, Taylor & Francis Journals, vol. 34(6-10), pages 1089-1117, December.
    35. Blomquist, Johan & Westerlund, Joakim, 2013. "Testing slope homogeneity in large panels with serial correlation," Economics Letters, Elsevier, vol. 121(3), pages 374-378.
    36. repec:hal:pseose:hal-01299948 is not listed on IDEAS
    37. Robert J. Willis, 1999. "A Theory of Out-of-Wedlock Childbearing," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 33-64, December.
    38. Cristian Pop-Eleches, 2010. "The Supply of Birth Control Methods, Education, and Fertility: Evidence from Romania," Journal of Human Resources, University of Wisconsin Press, vol. 45(4), pages 971-997.
    39. Máire Ní Bhrolcháin & Éva Beaujouan, 2012. "Fertility postponement is largely due to rising educational enrolment," Population Studies, Taylor & Francis Journals, vol. 66(3), pages 311-327.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Georgios Mavropoulos & Theodore Panagiotidis, 2020. "Why Young Adults Retreat from Marriage? An Easterlin Relative Income Approach," Discussion Paper Series 2020_01, Department of Economics, University of Macedonia, revised Jan 2020.
    2. Shreya Pal, 2024. "The International Capital Flows and Domestic Savings–domestic Investment Nexus: A Comparative Evidence Between Heterogeneous Developing Regions," South Asian Journal of Macroeconomics and Public Finance, , vol. 13(2), pages 169-212, December.
    3. Huntington, Hillard & Liddle, Brantley, 2022. "How energy prices shape OECD economic growth: Panel evidence from multiple decades," Energy Economics, Elsevier, vol. 111(C).
    4. Goya, Daniel, 2020. "The exchange rate and export variety: A cross-country analysis with long panel estimators," International Review of Economics & Finance, Elsevier, vol. 70(C), pages 649-665.
    5. Le Clech, Néstor A., 2024. "Policy market orientation, property rights, and corruption effects on the rent of non-renewable resources in Latin America and the Caribbean," Resources Policy, Elsevier, vol. 91(C).
    6. Martin Falk & Eva Hagsten & Xiang Lin, 2023. "Uneven domestic tourism demand in times of pandemic," Tourism Economics, , vol. 29(3), pages 596-611, May.
    7. Daniel Goya, 2014. "The Multiple Impacts of the Exchange Rate on Export Diversification," Cambridge Working Papers in Economics 1436, Faculty of Economics, University of Cambridge.
    8. Vo, Duc, 2019. "The Impact of Foreign Direct Investment on Environment Degradation: Evidence from Emerging Markets in Asia," MPRA Paper 103292, University Library of Munich, Germany.
    9. Liddle, Brantley & Huntington, Hillard, 2021. "How prices, income, and weather shape household electricity demand in high-income and middle-income countries," Energy Economics, Elsevier, vol. 95(C).
    10. Eibinger, Tobias & Deixelberger, Beate & Manner, Hans, 2024. "Panel data in environmental economics: Econometric issues and applications to IPAT models," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    11. Yilmaz Bayar & Özlem Yorulmaz & Oğuzhan Yelkesen & Valentin Toader, 2024. "The interaction between ICT penetration and sustainable development: empirical evidence from African countries," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-17, December.
    12. Mamba, Essotanam & Ali, Essossinam, 2022. "Do agricultural exports enhance agricultural (economic) growth? Lessons from ECOWAS countries," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 257-267.
    13. Nektarios Aslanidis & Selva Demiralp, 2020. "Has the Financial Crisis affected the Real Interest Rate Dynamics in Europe?," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 16(1), pages 1-18, April.
    14. Niklas Potrafke, 2012. "Political cycles and economic performance in OECD countries: empirical evidence from 1951–2006," Public Choice, Springer, vol. 150(1), pages 155-179, January.
    15. Fletcher, Jason M. & Polos, Jessica, 2017. "Nonmarital and Teen Fertility," IZA Discussion Papers 10833, Institute of Labor Economics (IZA).
    16. Schneider, Nicolas & Strielkowski, Wadim, 2023. "Modelling the unit root properties of electricity data—A general note on time-domain applications," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 618(C).
    17. Hilaire Gbodja Houeninvo, 2022. "Effects of health expenditures on infant and child mortality rates: A dynamic panel data analysis of 37 African countries," African Development Review, African Development Bank, vol. 34(2), pages 255-267, June.
    18. Saboori, Behnaz & Gholipour, Hassan F. & Rasoulinezhad, Ehsan & Ranjbar, Omid, 2022. "Renewable energy sources and unemployment rate: Evidence from the US states," Energy Policy, Elsevier, vol. 168(C).
    19. Afonso, António & Jalles, João Tovar, 2013. "Growth and productivity: The role of government debt," International Review of Economics & Finance, Elsevier, vol. 25(C), pages 384-407.
    20. Opoku, Eric Evans Osei & Dogah, Kingsley E. & Aluko, Olufemi Adewale, 2022. "The contribution of human development towards environmental sustainability," Energy Economics, Elsevier, vol. 106(C).

    More about this item

    Keywords

    Non-marital fertility; Easterlin hypothesis; Relative income;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:empeco:v:64:y:2023:i:3:d:10.1007_s00181-022-02285-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.