A THEORETICAL AND EMPIRICAL MODEL OF FERTILITY AND MARRIED WOMEN'S ALLOCATION OF TIME OVER THE LIFE CYCLE

In studying the fertility behavior of households, most economic studies have focused on households' choices of completed family size assuming that such choices maximize the parents' lifetime utility subject to their lifetime wealth and time constraints. Similarly, studies of female labor force participation assume that observed annual participation behavior reflects an optimal plan concerning the fraction of their lifetime women wish to spend in the labor force. But the analysis of a number of issues--such as the effects of changes in economic variables on the timing and spacing of births--requires the development of models which explicitly investigate dynamic aspects of life cycle fertility and the wife's time allocation decisions.;In Chapter 3, we derive an econometrically tractable life cycle model of fertility and wives' time allocation behavior based on parametric representations of the household utility function and the processes generating the life cycle path of the husband's income and the wife's wage rate. Our empirical model consists of three equations estimable with cross-sectional data: (1) an annual household conception decision rule equation, (2) the female's annual demand for leisure equation, and (3) an equation determining the wife's potential market wage rate. We derive a reduced form version of our model in which the coefficients on the independent variables and the elements of the equation error covariance matrix are unrestricted. Our theory also implies a set of cross-equation restrictions on the coefficients of our system. These restrictions, subject to a parameter normalization, enable us to estimate a set of structural parameters characterizing the household's utility function, it's marginal utility of wealth function and the wife's market wage.;In Chapter 4 we present parameter estimates of the reduced form and structural representations of our model for white and black households in the United States. For both racial groups we find that variables such as income, wages, number of children, and the wife's time commitments to child care help explain observed annual conception and the wife's time allocation decisions. At the same time, the cross-equation restrictions derived from our theory do not hold for either group. For both groups, our estimates of such parameters in the wife's demand for leisure equation are generally consistent with our theory but the parameters estimates in the conception decision rule equation are not. Finally, we compare the parameter estimates of our models across races and find that: (1) care of existing children constrain white women's labor supply and the time of additional births far more that it does blacks' and (2) the effects of changes in income on conception and the wife's labor supply behavior do not appear to differ by race.;This dissertation represents an attempt to develop such a model. In Chapter 2 of the dissertation, we derive a utility-maximizing model in which households make decisions in each period concerning whether or not to have a child, how to allocate the wife's time between leisure and labor supply, and the level of consumption of market goods. The wife's wage rate and the husband's earnings are allowed to vary over the life cycle. We examine the predictions of this model concerning the effects of changes in the wife's wage rate and the household's income on fertility and labor supply decisions. In the second part of Chapter 2 we examine the implications of assuming that households are uncertain about future wages and income.