Youth Responses to Expected Income and “Relationship” Consequences in Nonmarital Childbearing Choices: Are Youths Rational?

Wolfe, Barbara, Karen Pence, and Robert Haveman
Working paper no. 2004-20


We hypothesize that the choices and behaviors of youths that may result in a teen nonmarital birth event are influenced by expectations of the consequences of each choice open to them. Two categories of such choice-conditioned long-term effects are explored: 1) a teen’s expected personal income stream, and 2) the probability that she will establish a long-term and stable family-type relationship. We also measure the effects of an extensive list of other factors, including the characteristics of the girl’s family and its choices, the social and economic environment in which she lives (including policy-related factors, such as public expenditures by states on family planning programs), her neighborhood’s characteristics and her own prior choices. The empirical work uses the Michigan Panel Study of Income Dynamics. The results provide evidence that both expected relationship stability and personal income differences play a role in influencing these choices with a suggestion that relationship stability may have greater weight. The results also suggest an important role for public family planning expenditures.