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Using Fertility Choices to Estimate Labor Income Shocks

Author

Listed:
  • Fatih Karahan

    (University of Pennsylvania)

  • Flavio Cunha

    (University of Pennsylvania)

Abstract

This paper builds on methods developed to estimate ex ante inequality. We use a life cycle fertility model to estimate how much people know about their income at different points in time. We exploit the key idea that if people know something and use that information in their fertility decisions, it will affect their fertility choices. Moreover, since fertility decisions are made every period, we can document how the agent's information set evolves over time.

Suggested Citation

  • Fatih Karahan & Flavio Cunha, 2009. "Using Fertility Choices to Estimate Labor Income Shocks," 2009 Meeting Papers 1146, Society for Economic Dynamics.
    • Handle: RePEc:red:sed009:1146
    as

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    References listed on IDEAS

    as
    1. Lillard, Lee A & Weiss, Yoram, 1979. "Components of Variation in Panel Earnings Data: American Scientists, 1960-70," Econometrica, Econometric Society, vol. 47(2), pages 437-454, March.
    2. MaCurdy, Thomas E., 1982. "The use of time series processes to model the error structure of earnings in a longitudinal data analysis," Journal of Econometrics, Elsevier, vol. 18(1), pages 83-114, January.
    3. Flavio Cunha & James Heckman & Salvador Navarro, 2005. "Separating uncertainty from heterogeneity in life cycle earnings," Oxford Economic Papers, Oxford University Press, vol. 57(2), pages 191-261, April.
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