Fertility in Denmark has fallen along with partnership rates, even though educational attainment has risen and is positively correlated with fertility. To understand the mechanisms behind these patterns, we develop and estimate an equilibrium model of education, marriage, labor supply, and fertility with imperfectly transferable utility and unobserved heterogeneity in fertility preferences. We identify women’s and men’s preferences for children separately from couples’ joint choices using variation in local marriage market conditions that shifts bargaining power. The estimated model attributes the decline mainly to falling preferences for children among women, while men’s preferences change little. Economic factors such as wages and the difficulty of combining work and children do not explain the decline. Policy counterfactuals show that holding education, marriage, and bargaining power fixed can substantially understate the effects of policies on fertility. Free childcare raises fertility by 3.4 percent, and partnership formation accounts for 41 percent of that gain. Closing the gender wage gap reduces fertility in part through a shift in bargaining power toward wives, who want fewer children than their husbands.
Joint with Frederik Almar.
✅ Past presentations: