How Does Adolescent Fertility Affect the Human Capital and Wages of Young Women?

Abstract

The consequences of teen childbearing for the future well-being of young women remain controversial. In this paper, we model and estimate the relationship between early childbearing and human capital investment, and its effect on wages in early adulthood. Taking advantage of a large set of potential instruments for fertility—principally state- and county-level indicators of the costs of fertility and fertility control—we use instrumental variables procedures to generate unbiased estimates of the effects of early fertility on education and work experience, and the effects of these outcomes on adult wages. For both black and white women, adolescent fertility substantially reduces years of formal education and teenage work experience. White teenage mothers also obtain less early adult work experience than young women who delay childbearing. We also find that, through these human capital effects, teenage childbearing has a significant effect on a young woman’s market wage at age 25. Our results, unlike those of recent “revisionist” studies, suggest that public policies that reduce teenage childbearing are likely to have positive effects on the economic well-being of many young mothers and their families.