Playing the Fertility Game at Work: An Equilibrium Model of Peer Effects

Ciliberto, Federico and Miller, Amalia and Skyt Nielsen, Helena and Simonsen, Marianne (2013): Playing the Fertility Game at Work: An Equilibrium Model of Peer Effects.

Abstract

We study workplace peer effects in fertility decisions using a game theory model of strategic interactions among coworkers that allows for multiple equilibria. Using register-based data on fertile-aged women working in medium sized establishments in Denmark, we uncover negative average peer effects. Allowing for heterogeneous effects by worker type, we find that positive effects dominate across worker types defined by age or education. Negative effects dominate within age groups and among low-education types. Policy simulations show that these estimated effects make the distribution of where women work an important consideration, beyond simply if they work, in predicting population fertility.

• Item Type: MPRA Paper
• Language: English
• Keywords: Fertility, peer effects, career-family conflict, workplace interactions, multiple equilibria
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables; J - Labor and Demographic Economics > J1 - Demographic Economics

References

Bandiera, O., I. Barankay, and I. Rasul (2010). “Social Incentives in the Workplace.” Review of Economic Studies 77 (2), 417-458.

Becker, G. (1960). “An Economic Analysis of Fertility,” in Becker (ed.) Demographic and Economic Change in Developed Countries. Princeton, N.J.: Princeton University Press.

Bernheim, B. D. (1994). “A Theory of Conformity.” Journal of Political Economy 102(5), 841-877.

Blake, D. and L. Mayhew (2006). “On The Sustainability of the UK State Pension System in the Light of Population Ageing and Declining Fertility.” Economic Journal 116(512), F286-F305.

Bloom, D., D. Canning, I. Gunther, and S. Linnemayr (2008). “Social Interactions and Fertility in Developing Countries.” Harvard School of Public Health Working Paper.

Blume, L. and S. Durlauf (2005). Identifying Social Interactions: A Review. San Francisco: Jossey-Bass.

Borsch-Supan, A. (2000). “A Model Under Siege: A Case Study of the German Retirement Insurance System.” Economic Journal 110(461), F24-F45.

Bresnahan, T. F., & Reiss, P. C. (1990). Entry in Monopoly Market. The Review of Economic Studies, 57(4), 531-553.

Brock, W. A. and S. N. Durlauf (2001). “Interactions-based Models,” in Heckman and Leamer (eds.) Handbook of Econometrics, Vol. 5, pp. 3297-3380. Elsevier.

Brock, W. A. and S. N. Durlauf (2007). “Identification of Binary Choice Models with Social Interactions.” Journal of Econometrics 140 (1), 52-75.

Card, D. and L. Giuliano (2011). “Peer Effects and Multiple Equilibria in the Risky Behavior of Friends.” NBER Working Paper 17088.

Chernozhukov, V., H. Hong and E. Tamer (2007). “Estimation and Confidence Regions for Parameter Sets in Econometric Models.” Econometrica, 75, 1243–1284.

Ciliberto, F. and E. Tamer (2009). “Market Structure and Multiple Equilibria in Airline Markets.” Econometrica 77(6), 1791-1828.

Cohen, A., Freeborn, B., and McManus, B. (2011, forthcoming). “Competition and Crowding-Out in the Market for Outpatient Substance-Abuse Treatment.” International Economic Review.

Cotter, D. A., Hermsen, J. M., and Vanneman, R. (2004). Gender inequality at work. Russell Sage Foundation.

Crane, J. (1991). “The epidemic theory of ghettos and neighborhood effects on dropping out and teenage childbearing.” American Journal of Sociology 96, 1226–1259.

Dahl, G. B., K. V. Løken, and M. Mogstad (2012). “Peer Effects in Program Participation.” NBER Working Paper No. 18198.

Duflo, E. and E. Saez (2003). “The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence From a Randomized Experiment.” Quarterly Journal of Economics 118 (3), 815-842.

Galor, Oded (2005). “The Demographic Transition and the Emergence of Sustained Economic Growth.” Journal of the European Economic Association, 3(2-3): 494-504.

Graham, B. S. and J. Hahn (2005). “Identification and Estimation of the Linear-in-Means Model of Social Interactions.” Economics Letters 88, 1-6.

Grant, J., S. Hoorens, S. Sivadasan, M. van het Loo, J. DaVanzo, L. Hale, S. Gibson, and W. Butz (2004). “Low Fertility and Population Aging: Causes, Consequences and Policy Options.” RAND Corporation Technical report.

Hotz, J. V., J. Klerman, and R. Willis (1997). “The economics of fertility in developed countries,” in Rosenzweig and Stark (eds.) Handbook of Population and Family Economics. Vol. 1, pp. 275-347. Elsevier.

Jones, L., A. Schoonbroodt, and M. Tertilt (2011). “Fertility Theories: Can They Explain the Negative Fertility-Income Relationship?” in Shoven (ed.) Demography and the Economy. University of Chicago Press.

Juul, S. W. Karmaus, J. Olsen and The European Infertility and Sub-fecundity Study Group (1999). “Regional Differences in Waiting Time to Pregnancy: Pregnancy-based Surveys from Denmark, France, Germany, Italy and Sweden.” Human Reproduction 14 (5), 1250-1254.

Kearney, M. S. (2004). “Is There an Effect of Incremental Welfare Benefits on Fertility Behavior? A Look at the Family Cap.” Journal of Human Resources 39(2): 295-325.

Kohler, H.-P. (2001). Fertility and Social Interaction - An Economic Perspective. Oxford: Oxford University Press.

Krauth, B. V. (2006). “Simulation-based Estimation of Peer Effects.” Journal of Econometrics 133(1), 243-271.

Kravdal, O. (2002). “Education and Fertility in Sub-saharan Africa: Individual and Community Effects.” Demography 39(2), 233-250.

Kuziemko, I. (2006). “Is Having Babies Contagious? Estimating Fertility Peer Effects Between Siblings.” Mimeo, Harvard University.

Lazear, E. P. and S. Rosen (1981). “Rank-order Tournaments as Optimum Labor Contracts.” Journal of Political Economy 89(5), 841-864.

Lindh, T. and B. Malmberg (1999). “Age structure effects and growth in the OECD 1950-1990.” Journal of Population Economics 12(3), 431-449.

Manski, C. (1993). “Identification of Endogenous Social Effects: The Reflection Problem.” Review of Economic Studies 60 (3), 531-542.

Manski, C. (1995). Identification Problems in the Social Sciences. Harvard University Press.

Manski, C. and J. Mayshar (2003). “Private incentives and social interactions: fertility puzzles in Israel.” Journal of the European Economic Association 1(1), 181-211.

Mas, A. and E. Moretti (2009). “Peers at Work.” American Economic Review 99(1), 112-145.

Miller, A. (2011). “The Effects of Motherhood Timing on Career Path.” Journal of Population Economics 24(3), 1071-1100.

Mincer, J. (1991). “Education and Unemployment of Women.” NBER Working Paper 3837.

Moffitt, R. (1998). “The Effect of Welfare on Marriage and Fertility: What Do We Know and What Do We Need to Know?” National Research Council.

Montgomery, M.R. and J.B. Casterline (1998). “Social Networks and the Diffusion of Fertility Control.” Population Council Policy Research Division Working Paper No. 119.

Montgomery, M.R. and J.B. Casterline (1996). “Social Learning, Social Influence, and New Models of Fertility.” Population and Development Review 22(Supplement: Fertility in the United States: New Patterns, New Theories): 151-175.

Mumford, K. (2007). “The Optimal Tax Treatment of Families with Children.” SIEPR Discussion Paper No. 0620.

Mumford, K. and M. F. Lovenheim (forthcoming). “Do Family Wealth Shocks Affect Fertility Choices? Evidence from the Housing Market Boom and Bust.” Review of Economics and Statistics.

Murray, C. (1993). “Welfare and the Family: The U.S. Experience.” Journal of Labor Economics 11 (1), S244-S262.

Nielsen, H. S., M. Simonsen, and M. Verner (2004). “Does the Gap in Family-friendly Policies Drive the Family Gap?” Scandinavian Journal of Economics 106(4), 721-744.

Rangel, A. (2003). “Forward and Backward Intergenerational Goods: Why Is Social Security Good for the Environment?” American Economic Review 93(3), 813-834.

Rennhoff, A. D., & Owens, M. F. (2012). “Competition and the Strategic Choices of Churches.” American Economic Journal: Microeconomics, 4(3), 152-170.

Sacerdote, B. (2001). “Peer Effects with Random Assignment: Results for Dartmouth Roommates.” Quarterly Journal of Economics 116, 681-704.

South, S. and E. Baumer (2000). “Deciphering community and race effects on adolescent premarital childbearing.” Social Forces 78(4): 1379–1408.

Waldfogel, J. (1998). “Understanding the ‘Family Gap’ in Pay for Women with Children.” Journal of Economic Perspectives 12 (1), 137-156.

Willis, R. (1973). “A New Approach to the Economic Theory of Fertility Behavior.” Journal of Political Economy 81 (2), S14-S64.