Baby Commodity-Booms?: The Impact of Commodity Shocks on Fertility Decisions and Outcomes
Abstract: This paper uses international commodity prices and local natural resources endowments as a source of plausibly exogenous variation in local Chilean economic conditions to study how these shocks impact fertility behavior of families in a small, emerging, open economy where non-marital fertility was common but parental obligations not well enforced. We find that these commodity shocks lead to an increase in the log number of births and the birth rate. We argue that these results are consistent with most women experiencing an income effect and limited substitution effect from commodity booms. This is confirmed by looking at groups that would have experienced a larger income than substitution effect: higher-order births, births within marital relationships and those by mothers who do not experience an increase in their employment probability respond more strongly to these commodity booms.
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