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Title: Childbearing Postponement, its Option Value, and the Biological Clock
Resulting in 1 citation.
1. de la Croix, David
Pommeret, Aude
Childbearing Postponement, its Option Value, and the Biological Clock
Journal of Economic Theory published online (1 March 2021): DOI: 10.1016/j.jet.2021.105231.
Also: https://www.sciencedirect.com/science/article/pii/S002205312100048X
Cohort(s): NLSY79
Publisher: Elsevier
Keyword(s): Age at First Birth; Childbearing; Fertility; Income Risk

Having children is like investing in a risky project. Postponing birth is like delaying an irreversible investment. It has an option value, which depends on its costs and benefits, and in particular on the additional risks motherhood brings. We develop a parsimonious theory of childbearing postponement along these lines. We derive its implications for asset accumulation, income, optimal age at first birth, and childlessness. The structural parameters are estimated by matching the predictions of the model to data from the National Longitudinal Survey of Youth NLSY79. The uncertainty surrounding income growth is shown to increase with childbearing, and this increase is stronger for more educated people. This effect alone can explain why the age at first birth and the childlessness rate both increase with education. We use the model to simulate two hypothetical policies. Providing free medically assisted reproduction technology does not affect the age at first birth much, but lowers the childlessness rate. Insuring mothers against income risk is powerful in lowering the age at first birth.
Bibliography Citation
de la Croix, David and Aude Pommeret. "Childbearing Postponement, its Option Value, and the Biological Clock." Journal of Economic Theory published online (1 March 2021): DOI: 10.1016/j.jet.2021.105231.