Baby Commodity-Booms?: The Impact of Commodity Shocks on Fertility Decisions and Outcomes

This paper uses international commodity prices and local natural resources endowments as a source of plausibly exogenous variation in local economic conditions to study how these shocks impact fertility behavior of families in a small, emerging, open economy where non-marital fertility was common but parental obligations not well enforced. We find that these commodity shocks lead to an improvement in local economic conditions and an increase in the log number of births and the birth rate, as previous studies have demonstrated. However, more interestingly, we find that economic conditions do not seem to influence the decision to start a family but rather to expand it since only higher-order births are pro-cyclical. Furthermore, we find evidence that fewer single women conceive babies in periods of booms and that their partner is more likely to be employed and have a higher earning occupation, suggesting that booms influence not just fertility but family formation overall. We find limited evidence that babies conceived in periods of booms have worse health outcomes, as compared to the existing literature, maybe because better family formation counteract the births of more marginal children.