The baby boom, baby busts, and the role of grandmothers in childcare

Abstract

Studies in family economics and anthropology suggest that grandmothers are a highly valuable source of childcare assistance. As such, the availability of grandmothers affects the cost of having children, and hence the fertility decisions of young parents. In this paper, we develop a simple model to assess the fertility implications of the fluctuations in both output (as argued by demographers) and grandmother-availability induced child-care costs over the period of 1920-1970. The model does a good job of mimicking the bust-boom-bust pattern during this period. When the child-care cost channel is shut down, the model’s performance weakens significantly; in particular, it fails altogether to capture the bust in the 1960’s