Abstract

PIP: This theoretical model posits that women who delay child bearing will be more likely to invest in human capital (training that enhances productivity but is costly). This investment is conditioned by a greater discount rate than an economy-wide growth rate of wages for non-human capital investor women. The aim of the model is to present a more unified view of relationships between wages and fertility timing identified in earlier research. The empirical analyses, using ordinary least squares techniques, was based on data from the National Longitudinal Survey of Young Women, 1968-82 annually, for a sample of 1817 White working women aged 28-38 in 1982. Data were available for wages, education, work experience, age, number of children, and the percentage in occupations (manager, professional, administrative, service, and blue collar). First wages of women not in school and without a first birth were obtained for 991 women in the sample. Descriptive statistics revealed that the average early wage of late child bearers was 37% higher than the average early wage of early child bearers and 43% higher for 1982 wages. Childless women, compared to early child bearers, experienced a growth in wages from 31-38%. The assumptions in the theoretical model were 1) that all women were equally productive in the labor market in the beginning; 2) that women bore only one child; 3) that women worked continuously for a period of time, except for time out for child bearing; 4) that all women had the option of investing in one type of human capital, which cost the same for all women; 5) that the only source of income was the woman's own earnings; and 6) that a woman's lifetime utility was a function of the present value of her lifetime income and the intervening time period for child birth. Differences in education, experience, tenure, and wages were strongly associated with differences in fertility timing. The results revealed that wages were higher for delayed child bearers, primarily because of larger accumulations of human capital, assuming joint human capital and fertility timing decisions. The interpretation of regressions to test family influence was that unobserved heterogeneity partly explained the empirical relationship. Wages were affected by education, experience, and tenure, as proxies for human capital. Results were consistent with the hypothesis but did not confirm the theory.