Highly Educated Women Are Having More Children

Downton Abbey Demographers have long reported that as women
join the market economy and move up the income curve, they have
fewer and fewer children. This appears to be changing. A new
study in the
Economic Journal looks at U.S. fertility trends and finds
U-shaped fertility rates based on the educational levels of women.
Specifically, the researchers report that highly educated American
women are earning enough money to outsource child-rearing and
domestic chores. Since they can earn more in the market than it
costs to pay for child-rearing and housecleaning, they are choosing
to have more children. How does this work? From the study:

Marketization, however, affects the price for quantity that
parents face. For parents with low levels of human capital, (i.e.,
low income), marketization is low and thus the parents themselves
engage in most of the child-raising. … In contrast, parents
with high levels of human capital optimally outsource a major part
of their child-raising, which, in turn, reduces the cost of
children from the parents’ point of view. We show that this
reduction can be sufficiently large to induce an increase in
fertility above a certain level of human capital.

In our basic model, parental time spent on raising children
decreases with parents’ human capital. This occurs because the
fraction of income allocated to raising children decreases with the
parents’ human capital while parental reliance on market
substitutes increases with human capital…

Our model demonstrates how parents can substitute their own
parenting time for market-purchased childcare. We show that highly
educated women substitute a significant part of their own parenting
with childcare. This enables them to have more children and work
longer hours.