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Becker's Theory Of Fertility Essay

1706 words - 7 pages

The birth rate for the United States dropped 2 percent in 2008. This puts the US birth rate slightly the replacement level of fertility, 2.1 births per women. While some people express concern about the possibility of a decreasing population, others celebrate the large decrease in teen pregnancy. Preliminary analysis points to the slow economy as the reason behind the falling birthrate. While there seems to be a correlation between recession and lower birthrates this does not prove a causal link. To prove causation a theory must be proposed.
The Value of Time (VOT) theory of fertility developed by Gary Becker states that demand for children is determined by the value of time of the wife in a family. Over time extensive amounts of evidence has been gathered supporting this theory. For example, household surveys show a negative correlation between wages earned by wives and number of children. And, if we assume that wives are the sole providers of care for children, evidence collected showing positive correlation between husband's wages and number of children also supports Becker's theory. However, contrary to Becker's theory, recent trends show that women with lower wages due to the current recession are putting off childbirth while women with higher wages are having children (Stein, 2010). Given this discrepancy between historical data confirming and current data disproving Becker's theory new studies should consider performing an in-depth evaluation of the theory.
The model relies on many assumptions which can change in practicality depending on the economy, culture, and family structure in the country it is being applied to. This paper evaluated the validity of Becker's assumptions through analysis of data on time spent performing childcare activities in the United States. Beyond simple evaluation of Becker's assumptions further studies can take this paper's analysis and determine how emphasis in time spent on different childcare activities' effect on return on investment in children. Finally the combination of these studies can be used to create a more robust fertility model that takes into current parenting trends.
The primary source of data used for this paper comes from the 2008 American Time Use Survey (ATUS) conducted by the Berea of Labor Statistics. Subjects for the ATUS are randomly selected from a household who has completed the eight month Current Population Survey (CPS). The complete ATUS dataset includes information gathered from over 85,000 interviews between 2003 and 2008. The population of respondents is compared to the national population and each respondent is then weighted to create a nationally representative sample.
Raw data for ATUS comes in the form of time logs that subjects are asked to create. The logs contain a recording of everything the subject did on the previous day, how long they performed the activity for, who they performed the activity with, and where the activity was...

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