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Income Inequality and Early Non-Marital Childbearing: An Economic Exploration of the "Culture of Despair"

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  • Melissa Schettini Kearney
  • Phillip B. Levine

Abstract

Using individual-level data from the United States and a number of other developed countries, we empirically investigate the role of income inequality in determining rates of early, non-marital childbearing among low socioeconomic status (SES) women. We present robust evidence that low SES women are more likely to give birth at a young age and outside of marriage when they live in more unequal places, all else held constant. Our results suggest that inequality itself, as opposed to other correlated geographic factors, drives this relationship. We calculate that differences in the level of inequality are able to explain a sizeable share of the geographic variation in teen fertility rates both across U.S. states and across developed countries. We propose a model of economic “despair” that facilitates the interpretation of our results. It reinterprets the sociological and ethnographic literature that emphasizes the role of economic marginalization and hopelessness into a parsimonious framework that captures the concept of “despair” with an individual’s perception of economic success. Our empirical results are consistent with the idea that income inequality heightens a sense of economic despair among those at the bottom of the distribution.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17157.

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Date of creation: Jun 2011
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Publication status: published as Kearney, Melissa S. and Phillip Levine. “Income Inequality and Early, Non-Marital Childbearing,” Journal of Human Resources 49, Winter 2014: 1-31
Handle: RePEc:nbr:nberwo:17157

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  1. Angus Deaton & Darren Lubotsky, 2002. "Mortality, inequality and race in American cities and states," Working Papers 204, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  2. Adam Ashcraft & Iván Fernández‐Val & Kevin Lang, 2013. "The Consequences of Teenage Childbearing: Consistent Estimates When Abortion Makes Miscarriage Non‐random," Economic Journal, Royal Economic Society, vol. 123, pages 875-905, 09.
  3. Doug Miller & A. Colin Cameron & Jonah B. Gelbach, 2006. "Bootstrap-Based Improvements for Inference with Clustered Errors," Working Papers 621, University of California, Davis, Department of Economics.
  4. Greg Duncan & Saul Hoffman, 1990. "Welfare benefits, economic opportunities, and out-of-wedlock births among black teenage girls," Demography, Springer, vol. 27(4), pages 519-535, November.
  5. Lundberg, S. & Plotnick, R.D., 1994. "Adolescent Premarital Childbearing: Do Economic Incentives Matters?," Discussion Papers in Economics at the University of Washington 94-4, Department of Economics at the University of Washington.
  6. An, Chong-Bum & Haveman, Robert & Wolfe, Barbara, 1993. "Teen Out-of-Wedlock Births and Welfare Receipt: The Role of Childhood Events and Economic Circumstances," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 195-208, May.
  7. Levine, Phillip B., 2003. "Parental involvement laws and fertility behavior," Journal of Health Economics, Elsevier, vol. 22(5), pages 861-878, September.
  8. Melissa Schettini Kearney, 2004. "Is There an Effect of Incremental Welfare Benefits on Fertility Behavior?: A Look at the Family Cap," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
  9. Corak, Miles, 2006. "Do Poor Children Become Poor Adults? Lessons from a Cross Country Comparison of Generational Earnings Mobility," IZA Discussion Papers 1993, Institute for the Study of Labor (IZA).
  10. Ted O'Donoghue & Matthew Rabin, 1996. "Doing It Now or Later," Discussion Papers 1172, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  11. Robert A. Moffitt, 2003. "The Negative Income Tax and the Evolution of U.S. Welfare Policy," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 119-140, Summer.
  12. Becker, Gary S & Lewis, H Gregg, 1973. "On the Interaction between the Quantity and Quality of Children," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages S279-88, Part II, .
  13. Adam Ashcraft & Kevin Lang, 2006. "The Consequences of Teenage Childbearing," NBER Working Papers 12485, National Bureau of Economic Research, Inc.
  14. Jessica Cohen & Pascaline Dupas, 2010. "Free Distribution or Cost-Sharing? Evidence from a Randomized Malaria Prevention Experiment," The Quarterly Journal of Economics, MIT Press, vol. 125(1), pages 1-45, February.
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Cited by:
  1. Grönqvist, Hans & Hall, Caroline, 2013. "Education policy and early fertility: Lessons from an expansion of upper secondary schooling," Economics of Education Review, Elsevier, vol. 37(C), pages 13-33.
  2. Melissa Schettini Kearney & Phillip B. Levine, 2012. "Why is the Teen Birth Rate in the United States so High and Why Does it Matter?," NBER Working Papers 17965, National Bureau of Economic Research, Inc.
  3. Melissa Schettini Kearney & Phillip B. Levine, 2012. "Explaining Recent Trends in the U.S. Teen Birth Rate," NBER Working Papers 17964, National Bureau of Economic Research, Inc.

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