Delayed Childbearing and Urban Revival

17.10.2022 14:15 – 15:30

INSTITUTE OF ECONOMICS AND ECONOMETRICS SEMINAR

Jointly with Ana Moreno-Maldonado (CUNEF)

Abstact:

This paper highlights the role of delayed childbearing as an important driver of urban revival in U.S. cities. While downtown neighborhoods provide shorter commuting times and more consumption amenities, limited housing space and schools' worse quality considerably reduce the value of this location when children are born. As households postponed parenthood, the life period in which individuals benefit the most from living downtown extended. Consequently, demand for downtown locations increased, contributing to urban revival. We first provide reduced-form evidence of the interaction between delayed childbearing and urban revival. We exploit exogenous variation in access to Assisted Reproductive Technology (ART) to obtain causal estimates of the impact of delayed parenthood. The higher availability of ART increased income downtown by 5.4% relative to the suburbs. We then estimate a spatial equilibrium model that incorporates a fertility timing decision and a within-city location choice. We calculate the counterfactual urban revival keeping the incentives to have children constant at its 1990 level. We explore the incentives coming from (i) taste for children, (ii) downtown amenities, and (iii) income child penalties. We find that the change in incentives to delay childbearing can generate a large share of the faster income growth downtown relative to the suburbs.

Sponsored by Centre LIVES

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