Study links rise in fertility rates for the rich to income inequality

A mother wearing a purse waving goodbye to a nanny holding her kid.

Photo credit: Getty images

Cheap home-care services might be helping wealthy mothers have more kids

This story originally appeared on the University’s Bold Thinkers blog, which ran from May 2018 to Nov. 2019.

Over the past few decades, growing income inequality in the United States has meant that the rich have grown richer. But a San Francisco State University Study suggests that they’ve also been accumulating something other than money: kids.

The research comes from San Francisco State Professor of Economics Michael Bar, whose study “Why did rich families increase their fertility? Inequality and marketization of child care” was published in December in the Journal of Economic Growth.

Carla Pennington

Associate Professor of Economics Michael Bar

Bar and his fellow researchers took U.S. Census Bureau statistics from 1980 and 2010 and compared fertility rates for married women across all income levels. (Fertility rates measure the number of live births per 1,000 women based on a specific age group.) In measuring income levels, Bar divided the survey’s population into 10 income groups. The study found that fertility for women with household incomes in the top 10 percent increased by 46 percent in the 30-year timeframe. On average, households in the top 30 percent of incomes also saw a 36 percent uptick in fertility. During that same period, the study shows, average hourly wages in that top income bracket grew from $28 to $50 for women and from $51 to $64 for men. Hourly wages for the poorest 10 percent, on the other hand, remained stagnant.

One way of interpreting this shift: increased income inequality may have enabled high-income couples to afford more outsourcing of child care, making it easier for them to have more kids.

“Richer families can now afford home-care services — like prepared meals, babysitters and day care — because of the continued rise in income inequality,” Bar said.

An examination of other factors, such as the cost of childcare relative to women’s wages and the disparity in education levels between women in high- and low-income homes, supported the idea that the increase in income inequality over the past 30 years has led to the marketization and affordability of home-care services for high-income families.

There’s a longstanding assumption in economics that richer families have fewer kids. The U.S. Census data studied by Bar corroborates that relationship — but it also shows that it might be changing. According to the research, the poorest families exhibited a fertility rate 27 percent higher than the richest families in 2010. That difference was more than 62 percent in 1980.

Bar thinks this research may have implications for national minimum wage policy. His study found that a large concentration of home-care workers are minimum wage earners, so a change in minimum wage would alter the cost of home-care services for high-income households.

“The study is not advocating in favor or against minimum wage policies,” said Bar. “We are just pointing to a novel link that shows that minimum wage can affect the rich in this specific way.”

Researchers Moshe Hazan at Tel-Aviv University, Oksana Leukhina at Federal Reserve Bank of St. Louis, David Weiss at Tel-Aviv University and Hosny Zoabi at New Economic School were coauthors on this study.