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Simultaneity in the Birth Rate Equation: The Effects of Eduction, Labor Force Participation, Income and Health
Darius J. Conger
John M. Campbell, Jr.
Abstract
Single equation models of fertility behavior are frequently subject to specification error and often fail to capture the dynamic nature of household decision-making. This paper takes a first step in resolving these difficulties by estimating the fertility equation within a simultaneous system and by tracing the time path of fertility determinants via Boot and Theil multipliers. The estimates obtained are reasonable in both sign and magnitude and the dynamic character of fertility behavior is borne out by the finding that ordinary least squares estimates generally under- or over-estimate the total effects of changes in fertility determinants. Of particular interest is an intergenerational variable which captures the effect of socio-economic status on fertility behavior.
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