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Risk Preferences and the Timing of Marriage and Childbearing

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Abstract

The existing literature on marriage and fertility decisions pays little attention to the roles played by risk preferences and uncertainty. However, given uncertainty regarding the arrival of suitable marriage partners, the ability to contracept, and the ability to conceive, women’s risk preferences might be expected to play an important role in marriage and fertility timing decisions. Using data from the Panel Study of Income Dynamics, I find that measured risk preferences have a significant effect on both marriage and fertility timing. Highly risk tolerant women are more likely to delay marriage, consistent with either a search model of marriage or a risk-pooling explanation. In addition, risk preferences affect fertility timing in a way that differs by marital status and education, and that varies over the lifecycle. Greater tolerance for risk leads to earlier births at young ages, consistent with these women being less likely to contracept effectively. In addition, as the subgroup of college-educated, unmarried women nears the end of their fertile periods, highly risk tolerant women are likely to delay childbearing relative to their more risk averse counterparts, and are therefore less likely to become mothers. These findings may have broader implications for both individual and societal well-being.

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Bibliographic Info

Paper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2007-03.

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Length: 46 pages
Date of creation: Jul 2007
Date of revision:
Publication status: published in Demography, 2008, 45(2): 439- 60.
Handle: RePEc:wil:wileco:2007-03

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Citations

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Cited by:
  1. Anderson, Lisa R. & Mellor, Jennifer M., 2008. "Predicting health behaviors with an experimental measure of risk preference," Journal of Health Economics, Elsevier, vol. 27(5), pages 1260-1274, September.
  2. Shelly Lundberg, 2011. "Psychology and Family Economics," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 12(s1), pages 66-81, 05.
  3. Shelly Lundberg, 2012. "Personality and marital surplus," IZA Journal of Labor Economics, Springer, vol. 1(1), pages 1-21, December.
  4. Marcus Klemm, 2012. "Job Security and Fertility: Evidence from German Reunification," Ruhr Economic Papers 0379, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  5. Lisa Anderson & Jennifer Mellor, 2009. "Are risk preferences stable? Comparing an experimental measure with a validated survey-based measure," Journal of Risk and Uncertainty, Springer, vol. 39(2), pages 137-160, October.
  6. Luc Arrondel & Nicolas Frémeaux, 2013. ""For richer, for poorer": savings preferences and choice of spouse," Working Papers halshs-00786245, HAL.
  7. Audrey Light & Yoshiaki Omori, 2013. "Determinants of Long-Term Unions: Who Survives the “Seven Year Itch”?," Population Research and Policy Review, Springer, vol. 32(6), pages 851-891, December.
  8. Rafael Barrera Gutiérrez, 2011. "El vacío institucional en el modelo de elección racional aplicado a la fecundidad," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 13(25), pages 223-248, July-Dece.
  9. Fang, Hanming & Keane, Michael & Silverman, Dan, 2006. "Sources of Advantageous Selection: Evidence from the Medigap Insurance Market," Working Papers 17, Yale University, Department of Economics.
  10. David A. Love, 2010. "The Effects of Marital Status and Children on Savings and Portfolio Choice," Review of Financial Studies, Society for Financial Studies, vol. 23(1), pages 385-432, January.
  11. Ahn, Taehyun, 2010. "Attitudes toward risk and self-employment of young workers," Labour Economics, Elsevier, vol. 17(2), pages 434-442, April.
  12. Luc Arrondel & Nicolas Frémeaux, 2013. ""For richer, for poorer": savings preferences and choice of spouse," PSE Working Papers halshs-00786245, HAL.
  13. De Paola, Maria & Gioia, Francesca, 2013. "Does Patience Matter for Marriage Stability? Some Evidence from Italy," IZA Discussion Papers 7769, Institute for the Study of Labor (IZA).

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