The Effect of Cognitive Skills on Fertility Timing

Abstract

Early childbirth varies sharply with cognitive ability: in a nationally representative U.S. cohort, 69% of women in the lowest cognitive ability quartile have had a first birth before age 22, compared with 22% in the highest quartile. I estimate a dynamic life-cycle model of schooling, work, marriage, and contraceptive effort to ask whether standard opportunity-cost channels can account for this gradient. They cannot: a nested specification test rejects the hypothesis that opportunity costs alone explain the early-birth gap. Matching the data requires that cognitive ability also raises the effectiveness of contraceptive effort in reducing pregnancy risk—a mechanism absent from the existing structural fertility literature. Two counterfactuals illustrate its quantitative importance. First, equalizing contraceptive effectiveness to high-ability levels reduces pregnancies before age 22 by 50% and raises college attendance by 15%. Second, a cost-reduction policy that lowers aggregate early pregnancies by 10% generates welfare gains equivalent to 10% of lifetime consumption for the lowest ability quartile, but near-zero gains for the highest—reflecting that the binding constraint for disadvantaged women is contraceptive effectiveness, not cost.

Agustin Diaz Casanueva

Economist

I study how households make economic decisions about consumption, fertility, and labor supply in response to shocks and policy changes.