Essays on the Economics of Fertility

Abstract

This thesis includes three topics: (a) the effects of childbirth subsidy policies on the number of births in South Korea, (b) how a slowdown in retirement affects fertility rates among young adults through the labor market, and (c) how underemployment (i.e., overeducation) affects marriage and childbirth among young adults.In the first essay, I analyzed the effects of three types of childbirth subsidy policies on the number of births in South Korea using collected data, where the total fertility rate (TFR) has repeatedly hit record lows over the past few decades. Because these policies are a typical example of staggered treatment timing, I adopted interaction-weighted (IW) estimators to return values that would permit interpretation of causal relationships. The results show that the subsidies for families who produced their first (second) child increased the number of first (second) children by 3.4% (2.8%) to 5.0% (11.6%). I found a consistently positive impact of the first and second child policies when separately analyzing data from urban and rural areas. However, based on sensitivity analysis, for which I modified the original IW estimates by using observed pre-existing trends as possible post-trends, the cash-based subsidies for first (second) children positively related to the number of first (second) children only in urban (rural) areas, suggesting heterogeneous effects of the same policies in urban and rural areas. Based on IW estimates or sensitivity analysis, no evidence emerged that providing grants for third or subsequent births contributed to an increase in third or subsequent children. The aim of the second essay was to examine the impact of an increase in the retirement age on the fertility of young adults based on their labor market outcomes. I investigated whether delayed retirement among the elderly beyond FRA (Full Retirement Age) deteriorated the quantity and quality of employment, and eventually the childbirth, of young adults. I found that a higher number of older workers decreased full-time employment and increased part-time employment for economic reasons among young adults aged 20–29. However, workers aged 30–39 remained unaffected. Second, I confirmed the relationship between childbirth and economic conditions: full-time employment positively related to fertility, and part-time employment for economic reasons and unemployment negatively related to fertility. Finally, I found two pathways through which a growing elderly workforce compromised fertility among young adults: (a) lowering the number of young adults aged 20–24 who were full-time workers and (b) raising the number of young adults aged 20–24 and 25–29 who were part-time workers. In particular, the negative impact on fertility due to delayed retirement was concentrated in married individuals aged 20–24 years. In the third essay, I explored the effect of underemployment – a phenomenon in which 4-year college graduates gain employment in a place that does not require that degree – on marriage and childbirth using the NLSY97. To help explain the link between underemployment and marriage and childbirth, I additionally investigated the factors related to initial underemployment and the effect of underemployment on future labor market outcomes. First, I found that being underemployed at the start of a career highly related to grades and major. Second, I found no evidence that underemployment prevented marriage and childbirth in the short term, both in cross-sectional and panel analyses. Third, through a hazard model analysis, I confirmed that underemployment persistently affected future labor market outcomes for both men and women and that the effect was stronger for men. I also found that, at least for women, underemployment at the beginning of a career negatively related to having a first child. Fourth, with a different measurement method to judge underemployment, I found that underemployed men at a starting point in their career were more likely to remain persistently underemployed but that being underemployed at the start did not relate to marriage or childbirth for men and women.