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Private and Social Incentives for Fertility: Israeli Puzzles

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  • Charles F. Manski
  • Joram Mayshar

Abstract

Whereas most of the world has experienced decreasing fertility during the past half century, Israel has experienced a puzzling mix of trends. Completed fertility has decreased sharply in some ethnic-religious groups (Mizrahi Jews and non-Bedouin Arabs) and increased moderately in other groups (non-ultra-orthodox Ashkenazi and Israeli-born Jews). In a phenomenon that can only be described as a reverse fertility transition, fertility has increased substantially (from about 3 to 6 children per women) among ultra-orthodox Ashkenazi and Israeli-born Jews. This paper explores how private and social incentives for fertility may have combined to produce the complex pattern of fertility in Israel. Theoretical analysis of the social dynamics of fertility shows that this pattern could have been generated by the joint effects of (a) private preferences for childbearing, (b) preferences for conformity to group fertility norms, and (c) the major child-allowance program introduced by the Israeli government in the 1970s. Econometric analysis of fertility decisions shows that fundamental identification problems make it difficult to infer the actual Israeli fertility process from data on completed fertility. Hence we are able to conjecture meaningfully on what may have happened, but we cannot definitively resolve the Israeli fertility puzzles.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8984.

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Date of creation: Jun 2002
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Publication status: published as Charles F. Manski & Joram Mayshar, 2003. "Private Incentives and Social Interactions: Fertility Puzzles in Israel," Journal of the European Economic Association, MIT Press, vol. 1(1), pages 181-211, 03.
Handle: RePEc:nbr:nberwo:8984

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  1. James R. Walker, 1994. "The Effect of Public Policies on Recent Swedish Fertility Behavior," Labor and Demography 9410001, EconWPA.
  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. Eli Berman, 1998. "Sect, Subsidy, and Sacrifice: An Economist's View of Ultra-Orthodox Jews," NBER Working Papers 6715, National Bureau of Economic Research, Inc.
  4. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 115-136, Summer.
  5. Manski, Charles F, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Wiley Blackwell, vol. 60(3), pages 531-42, July.
  6. Hotz, V Joseph & Miller, Robert A, 1988. "An Empirical Analysis of Life Cycle Fertility and Female Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 91-118, January.
  7. Boyer, George R, 1989. "Malthus Was Right after All: Poor Relief and Birth Rates in Southeastern England," Journal of Political Economy, University of Chicago Press, vol. 97(1), pages 93-114, February.
  8. Brock,W.A. & Durlauf,S.N., 2000. "Discrete choice with social interactions," Working papers 7, Wisconsin Madison - Social Systems.
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Cited by:
  1. Iyer, S. & Weeks, M., 2004. "Multiple Social Interaction and Reproductive Externalities: An Investigation of Fertility Behaviour in Kenya," Cambridge Working Papers in Economics 0461, Faculty of Economics, University of Cambridge.
  2. Peng Yu, 2006. "Higher Education, the Bane of Fertility? An investigation with the HILDA Survey," CEPR Discussion Papers 512, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  3. Iyer, Sriya & Velu, Chander, 2006. "Real options and demographic decisions," Journal of Development Economics, Elsevier, vol. 80(1), pages 39-58, June.
  4. Miles S. Kimball & Colter M. Mitchell & Arland D. Thornton & Linda C. Young-Demarco, 2009. "Empirics on the Origins of Preferences: The Case of College Major and Religiosity," NBER Working Papers 15182, National Bureau of Economic Research, Inc.
  5. Angrist, Joshua & Lavy, Victor & Schlosser, Analia, 2006. "New Evidence on the Causal Link between the Quantity and Quality of Children," IZA Discussion Papers 2075, Institute for the Study of Labor (IZA).

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