Cultural Influences on the Fertility Behavior of First- and Second-Generation Immigrants

This paper argues that the conventional strategy of identifying a cultural effect using variation across countries of origin may be biased because the assumption that all immigrants make their choices in an identical environment in the host country is unlikely to hold true, even when controlling for individual characteristics. We discuss different mechanisms behind the bias and propose to eliminate it by exploiting only the variation within countries of origin. In our application (fertility of immigrants in Germany), the cultural effect survives this more demanding specification; however, the estimated coefficient is smaller compared to estimations that rely on cross-country variation for identification. We also show that the cultural influence is considerably smaller in the second generation of immigrants.