The Relationship Between Wages and Income and the Timing and Spacing of Births: Evidence from Swedish Longitudinal Data

This paper considers the formulation, estimation, and evaluation of semiparametric multistates duration models with time-varying regressors and unobservables correlated over spells. The authors' models are applied to test a dynamic version of the neoclassical theory of fertility. Using Swedish data, they find that rising female wages over the lifecycle delay times to all conceptions, but barely affect childlessness. The authors estimate a model that predicts fertility attained at different ages as well as the aggregate time series of birth rates. Estimated cohort drift in wage and income parameters is consistent with the expansion of pronatal social programs over the sample period.