(), Markus Brueckner
() and Benedikt Herz
Philipp Ager: Department of Business and Economics, Postal: University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark
Markus Brueckner: Australian National University, Postal: Canberra ACT 0200, Australia
Benedikt Herz: European Commission, Postal: 1049 Brussels, Belgium
Abstract: This paper provides new insights on the link between structural change and the fertility transition. In the early 1890s agricultural production in the American South was severely impaired by the spread of an agricultural pest, the boll weevil. We use this plausibly exogenous variation in agricultural production to establish a causal link between changes in earnings opportunities in agriculture and fertility. Our estimates show that lower earnings opportunities in agriculture lead to fewer children. We identify two channels: households staying in agriculture reduced fertility because children are a normal good, and households switching to manufacturing faced higher opportunity costs of raising children. The rather bleak outlook for unskilled agricultural workers also increased the demand for human capital, which reinforced the fertility decline that occurred in the American South during the late 19th and early 20th centuries.
54 pages, April 24, 2017
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