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Do Teens Make Rational Choices? The Case of Teen Nonmarital Childbearing

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  • R. Haveman
  • B. Wolfe
  • K. Wilson
  • E. Peterson

Abstract

With emphasis on the role of economic incentives, we explore the determinants of a woman’s choice of whether or not to give birth as an unmarried teenager. Our data are taken from the Panel Study of Income Dynamics. Guided by a simple utility-maximization model, we represent the income possibilities available to teenaged women if they do and do not give birth out of wedlock. We estimate these choice-conditioned income possibilities through a two-stage probit procedure, relying on the observed incomes of a secondary sample of somewhat older women. The response of the young women in our primary sample to these income expectations is measured after controlling for the effects of a variety of other factors, including the characteristics of the girl’s family, the social and economic environment in which she lives (including such policy-related factors as expenditures by states on family planning programs and education), and her own prior choices. We use the estimated structural parameters from our model to simulate the effects of a variety of policy interventions on the probability of becoming an unmarried teen mother. Our estimations provide evidence that income expectations have a persistent influence on the childbearing decision. They also provide evidence that the provision of public family planning expenditures and increases in parental education could reduce the prevalence of teen nonmarital births.

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Paper provided by University of Wisconsin Institute for Research on Poverty in its series Institute for Research on Poverty Discussion Papers with number 1137-97.

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Handle: RePEc:wop:wispod:1137-97

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  1. Clarke, G.R.G. & Strauss, R.P., 1994. "Children as Income Produting Assets: The Case of Teen Illegitimacy and Government Transfers," RCER Working Papers 389, University of Rochester - Center for Economic Research (RCER).
  2. Lee, Lung-Fei, 1979. "Identification and Estimation in Binary Choice Models with Limited (Censored) Dependent Variables," Econometrica, Econometric Society, Econometric Society, vol. 47(4), pages 977-96, July.
  3. 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.
  4. Saul D. Hoffman & E. Michael Foster, 1997. "AFDC Benefits and Nonmarital Births to Young Women," JCPR Working Papers, Northwestern University/University of Chicago Joint Center for Poverty Research 3, Northwestern University/University of Chicago Joint Center for Poverty Research.
  5. Larry Bumpass & R. Raley, 1995. "Redefining single-parent families: Cohabitation and changing family reality," Demography, Springer, Springer, vol. 32(1), pages 97-109, February.
  6. Charles F. Manski, 1993. "Adolescent Econometricians: How Do Youth Infer the Returns to Schooling?," NBER Chapters, in: Studies of Supply and Demand in Higher Education, pages 43-60 National Bureau of Economic Research, Inc.
  7. Lundberg, S. & Plotnick, R.D., 1994. "Adolescent Premarital Childbearing: Do Economic Incentives Matters?," Working Papers, University of Washington, Department of Economics 94-4, University of Washington, Department of Economics.
  8. 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.
  9. Bronars, Stephen G & Grogger, Jeff, 1994. "The Economic Consequences of Unwed Motherhood: Using Twin Births as a Natural Experiment," American Economic Review, American Economic Association, American Economic Association, vol. 84(5), pages 1141-56, December.
  10. Zvi Eckstein & Kenneth I. Wolpin, 1989. "The Specification and Estimation of Dynamic Stochastic Discrete Choice Models: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 24(4), pages 562-598.
  11. Wolpin, Kenneth I, 1984. "An Estimable Dynamic Stochastic Model of Fertility and Child Mortality," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 92(5), pages 852-74, October.
  12. Geronimus, Arline T & Korenman, Sanders, 1992. "The Socioeconomic Consequences of Teen Childbearing Reconsidered," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 107(4), pages 1187-214, November.
  13. G. Acs, . "The impact of AFDC on young women's childbearing decisions," Institute for Research on Poverty Discussion Papers, University of Wisconsin Institute for Research on Poverty 1011-93, University of Wisconsin Institute for Research on Poverty.
  14. Akerlof, George A & Yellen, Janet L & Katz, Michael L, 1996. "An Analysis of Out-of-Wedlock Childbearing in the United States," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 111(2), pages 277-317, May.
  15. Robert Haveman & Barbara Wolfe, 1995. "The Determinants of Children's Attainments: A Review of Methods and Findings," Journal of Economic Literature, American Economic Association, vol. 33(4), pages 1829-1878, December.
  16. V. Joseph Hotz & Robert A. Miller, . "An Empirical Analysis of Life Cycle Fertility and Female Labor Supply," University of Chicago - Population Research Center, Chicago - Population Research Center 86-15, Chicago - Population Research Center.
  17. Rosenzweig, Mark R & Wolpin, Kenneth I, 1995. "Sisters, Siblings, and Mothers: The Effect of Teen-Age Childbearing on Birth Outcomes in a Dynamic Family Context," Econometrica, Econometric Society, Econometric Society, vol. 63(2), pages 303-26, March.
  18. Robert Moffitt, 1994. "Welfare Effects on Female Headship with Area Effects," Journal of Human Resources, University of Wisconsin Press, vol. 29(2), pages 621-636.
  19. Arline Geronimus & Sanders Korenman, 1993. "The socioeconomic costs of teenage childbearing: Evidence and interpretation," Demography, Springer, Springer, vol. 30(2), pages 281-290, May.
  20. Greg Duncan & Saul Hoffman, 1990. "Welfare benefits, economic opportunities, and out-of-wedlock births among black teenage girls," Demography, Springer, Springer, vol. 27(4), pages 519-535, November.
  21. R. D. Plotnick, . "The effect of attitudes on teenage premarital pregnancy and its resolution," Institute for Research on Poverty Discussion Papers, University of Wisconsin Institute for Research on Poverty 965-92, University of Wisconsin Institute for Research on Poverty.
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Cited by:
  1. Mariana Alfonso, 2008. "Girls Just Want to Have Fun? Sexuality, Pregnancy, and Motherhood among Bolivian Teenagers," Research Department Publications, Inter-American Development Bank, Research Department 4538, Inter-American Development Bank, Research Department.
  2. Mariana Alfonso, 2008. "Las chicas sólo quieren divertirse? Sexualidad, embarazo y maternidad en las adolecentes de Bolivia," Research Department Publications, Inter-American Development Bank, Research Department 4539, Inter-American Development Bank, Research Department.
  3. José Canals-Cerdá & Shiferaw Gurmu, 2008. "Premarital Birth Among Young Hispanic Women: Evidence from Semiparametric Competing Risks Analysis," Atlantic Economic Journal, International Atlantic Economic Society, International Atlantic Economic Society, vol. 36(4), pages 421-440, December.

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