Fertility
Paper Session
Monday, Jan. 5, 2026 8:00 AM - 10:00 AM (EST)
- Chair: Russell Wong, Federal Reserve Bank of Richmond
Cats, Dogs and Babies
Abstract
Using newly linked Taiwanese administrative datasets, including an annual census of dog and cat registrations from 1999 to 2020 matched to complete personal tax records from 2009 to 2020, we revisit the claim that “pets crowd out babies.” We exploit two quasi-experimental price shocks: a childbirth subsidy and large receipt lottery windfalls. These allow us to estimate cross elasticities between childbearing and pet ownership. The results reveal a Marshallian cross elasticity of −1.32: as the effective cost of children falls, pet ownership rises. Combined with income elasticity estimates, we recover a child price elasticity of fertility of −0.21, suggesting that pets and children are complements, not substitutes. Event study evidence reveals dynamic asymmetry. Acquiring a dog sharply increases subsequent births among previously childless adults (a “starter family” effect), while a new baby temporarily depresses further pet acquisitions, likely due to time constraints. Overall, our findings challenge popular narratives and suggest that pet ownership may support, rather than displace, fertility.Baby Bust and Housing Boom under Shadow of War
Abstract
A significant fertility decline is observed in regions such as South Korea, Taiwan, Hong Kong, Japan, and coastal China, which have also been exposed to rising risks of war and associated damage. We devise a novel competitive-search model of portfolio choice between housing and human capital, which can be damaged by wars. In our model, raising children is an equity-financed, irreversible investment, whereas housing is a defaultable debt-financed, resaleable asset. Escalation of war risk reduces the demand for children but raises the price of housing in the frictional markets because defaulting on the housing debt provides implicit insurance against wars. To test our theory, we use the household's fraction of daughters, who are exempt from military obligation in Taiwan, as an instrument for exposure to war risk. Using the administrative data of tax returns, we find evidence that households with higher exposure to war risk invest more in housing and have lower fertility rates. Our theory is also consistent with the evidence on the macro level. Finally, we derive the policy implications from this new mechanism of fertility decline.What Accounts for the Racial Gap in Time Allocation and Intergenerational Transmission of Human Capital?
Abstract
This paper analyzes the sources of the racial difference in the intergenerational transmission of human capital by developing and estimating a dynastic model of parental time and monetary inputs in early childhood with endogenous fertility, home hours, labor supply, marriage, and divorce. It finds that the racial differences in the marriage matching patterns lead to racial differences in labor supply and home hours of couples. Although both the black-white labor market earnings and marriage market gaps are important sources of the black-white achievement gap, the assortative mating and divorce probabilities racial gaps accounts for a larger fraction of it.JEL Classifications
- E0 - General
- D1 - Household Behavior and Family Economics