| Summary: | In the first paper I investigate whether higher returns to education for women lead to a reduction in teen birth rates. I first estimate the impact of the growth in the female college wage premium on teen birth rates in the U.S. An increase in the college wage premium is a proxy for higher expected earnings after completing college. Higher future earnings create incentives to pursue further education and they decrease the relative returns to having a birth as a teen. Using state variation, I find that an increase in the female college wage premium does lead to a reduction in teen birth rates. To address endogeneity and measurement error issues, I use a shift-share instrumental variable for women's wages to construct the female college wage premium. Results from three supplemental analyses support the main results. First, teen birth rates respond less to the growth in the female high school wage premium. Second, the estimates suggest that growth in the male college wage premium has a lower impact on teen birth rates but the results are not conclusive. Third, the elasticity of fertility with respect to the female college wage premium decreases as women grow older. This research can explain approximately 30% of the fall in teen birth rates that has occurred from the early 1990s up to the present.
In the second paper, I investigate the impact of permanent changes in employment on teen birth rates. The employment opportunities occur through large scale capital investments by corporations in counties. Often local governments enter into a bidding contest for businesses to locate in their jurisdictions. To create the right incentives for firms, these local governments can offer large subsidies including tax breaks, land, tax-exempt bonds, construction of roads and other investments. I estimate the impact of entry of plants in a county on teen birth rates. Using a difference in difference analysis where counties that lose the bid by a very narrow margin consist of the counterfactual group, my results suggest that suggest that teen birth rates decline more in treatment versus comparison counties. Moreover, it appears that black teen birth rates decrease to a greater extent than white teen birth rates in response to the new employment opportunities.
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