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Childbearing postponement, its option value, and the biological clock

Author

Listed:
  • David de la Croix

    (UCL - Université Catholique de Louvain = Catholic University of Louvain)

  • Aude Pommeret

    (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc)

Abstract

Having children is like investing in a risky project. Postponing birth is like delaying an irreversible investment. It has an option value, which depends on its costs and benefits, and in particular on the additional risks motherhood brings. We develop a parsimonious theory of childbearing postponement along these lines. We derive its implications for asset accumulation, income, optimal age at first birth, and childlessness. The structural parameters are estimated by matching the predictions of the model to data from the National Longitudinal Survey of Youth NLSY79. The uncertainty surrounding income growth is shown to increase with childbearing, and this increase is stronger for more educated people. This effect alone can explain why the age at first birth and the childlessness rate both increase with education. We use the model to simulate two hypothetical policies. Providing free medically assisted reproduction technology does not affect the age at first birth much, but lowers the childlessness rate. Insuring mothers against income risk is powerful in lowering the age at first birth.

Suggested Citation

  • David de la Croix & Aude Pommeret, 2021. "Childbearing postponement, its option value, and the biological clock," Post-Print hal-03969089, HAL.
    • Handle: RePEc:hal:journl:hal-03969089
    DOI: 10.1016/j.jet.2021.105231
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    Citations

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    Cited by:

    1. d'Albis, Hippolyte & Greulich, Angela & Ponthiere, Gregory, 2018. "Development, fertility and childbearing age: A Unified Growth Theory," Journal of Economic Theory, Elsevier, vol. 177(C), pages 461-494.
    2. Thomas TB Baudin & David De la Croix & Paula Eugenia Gobbi, 2019. "Childlessness and Economic Development: a Survey," Working Papers ECARES 2019-03, ULB -- Universite Libre de Bruxelles.
    3. Bhalotra, Sonia R. & Venkataramani, Atheendar & Walther, Selma, 2018. "Fertility and Labor Market Responses to Reductions in Mortality," IZA Discussion Papers 11716, Institute of Labor Economics (IZA).
    4. András Olivér Németh & Petra Németh & László Tőkés, 2025. "Empirical analysis of the differences in the drivers of fertility between CEE countries and the rest of the EU," Journal of Population Research, Springer, vol. 42(2), pages 1-25, June.
    5. Komada, Oliwia, 2024. "Raising America’s future: Search for optimal child-related transfers," Economic Modelling, Elsevier, vol. 138(C).
    6. Claudio Costanzo, 2022. "Robots, Jobs, and Optimal Fertility Timing," Working Papers ECARES 2022-36, ULB -- Universite Libre de Bruxelles.
    7. Virginia Sanchez Marcos & Ezgi Kaya & Nezih Guner, 2017. "Labor Market Frictions and Lowest Low Fertility," 2017 Meeting Papers 1015, Society for Economic Dynamics.
    8. Giray Gozgor & Mehmet Huseyin Bilgin & Peter Rangazas, 2021. "Economic Uncertainty and Fertility," Journal of Human Capital, University of Chicago Press, vol. 15(3), pages 373-399.
    9. Abad, Nicolas & Etner, Johanna & Raffin, Natacha & Seegmuller, Thomas, 2025. "New fertility patterns: The role of human versus physical capital," Journal of Economic Theory, Elsevier, vol. 228(C).
    10. Fabio Blasutto, 2024. "Cohabitation vs. Marriage: Mating Strategies by Education in The USA," Journal of the European Economic Association, European Economic Association, vol. 22(4), pages 1723-1761.
    11. Doepke, Matthias & Hannusch, Anne & Kindermann, Fabian & Tertilt, Michèle, 2022. "The Economics of Fertility: A New Era," IZA Discussion Papers 15224, Institute of Labor Economics (IZA).
    12. Bhalotra, Sonia R. & Venkataramani, Atheendar & Walther, Selma, 2018. "Fertility and Labor Market Responses to Reductions in Mortality," IZA Discussion Papers 11716, Institute of Labor Economics (IZA).
    13. Szabó-Bakos, Eszter & Kuncz, Izabella & Németh, Petra, 2023. "A harmincévesnél fiatalabb anyák szja-kedvezményének várható demográfiai és makrogazdasági hatásai [The expected demographic and macroeconomic effects of the personal income tax relief for mothers ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1213-1229.
    14. Johanna Etner & Natacha Raffin & Thomas Seegmuller, 2022. "Postponement, career development and fertility rebound," AMSE Working Papers 2225, Aix-Marseille School of Economics, France.
    15. Oliwia Komada, 2023. "Raising America's future: search for optimal child-related transfers," GRAPE Working Papers 84, GRAPE Group for Research in Applied Economics.

    More about this item

    Keywords

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    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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