{"content":[{"text":"1","bbox":{"left":0.117647,"top":0.089701,"width":0.01580899999999999,"height":0.021758}},{"text":"Introduction","bbox":{"left":0.16513,"top":0.089701,"width":0.174236,"height":0.021758}},{"text":"This paper studies the macroeconomic factors that aﬀect fertility in the U.S over the \n business cycle. My main focus is on the eﬀects of the national debt, government expenditures, \n budget deﬁcits and taxes on fertility decisions. I consider annual data over the period 1980- \n 2010 that include both macroeconomic variables and other variables that have been found, \n in the past, to be important in shaping fertility decisions. The paper shows that the total \n fertility rate (TFR) and the birth rate (BR) are both negatively aﬀected by ﬂuctuations \n in the debt-GDP ratio, government expenditures-GDP ratio and budget deﬁcit-GDP ratio, \n and positively by the tax revenues as a percentage of GDP. Interestingly, these results are \n robust to the inclusion of the female unemployment rate, the female participation rate, the \n GDP growth rate and other potentially important factors. I then construct a business cycle \n model with moral behavior and show that it can explain these ﬁndings. On the contrary, the \n model that abstracts from moral behavior fails to do that. The results of the paper suggest \n that, following expansionary policies, households ﬁnd it immoral to increase their demand \n for children because they are unwilling to pass the debt to their children. \n Studying the behavior of fertility rates over the business cycle is not new: in a theoretical \n work, Becker (1960) argues that an increase in income leads to an increase in both the \n quantity and quality of children, but the quantity elasticity is smaller than the quality \n elasticity. Other theoretical studies, such as Mincer (1963), Becker and Lewis (1973), show \n how fertility is aﬀected by changes in the incomes of males and females. Generally speaking, \n a fall in the income of males leads to a lower demand for children (because of the income \n eﬀect) while a fall in the income of females has an ambiguous eﬀect (as the income and the \n substitution eﬀects contradict). Becker (1981) suggests that the increase in income leads to \n a fertility decline because the positive income eﬀect on fertility is dominated by the negative \n substitution eﬀect that is attached to the opportunity cost of raising children. Previous \n literature examined also the eﬀects of fertility on economic activity (primarily on economic \n growth) and female labor supply. Galor and Weil (1996) presents a model in which there \n is positive feedback from low fertility to higher output per capita, higher relative wages of \n women, higher female participation rate in the labor force and then lower fertility. Therefore, \n they suggest feedback eﬀects between economic activity and fertility. Jones et al. (2011) ﬁnd \n that the ability of fertility theories to explain the fertility-income relationship is not robust \n and it depends on certain assumptions that are not equally plausible. \n On the empirical side, Mocan (1990) ﬁnds that higher unemployment rates of U.S. males \n and females are associated with lower fertility rates. The analyses also show that, when \n the divorce rate and the proportion of young marriages are added to the set of regressors,","bbox":{"left":0.117647,"top":0.132266,"width":0.76482,"height":0.7620779999999999}},{"text":"2","bbox":{"left":0.495219,"top":0.935507,"width":0.00955199999999995,"height":0.015109999999999957}}],"images_bbox":[],"images_bbox_not_text_overlap":[]}