Health and the Revolution in Household Behavior 1880-1940: Fertility, Education and Married Female Labor Supply

Between the latter nineteenth century and the 1930s there was a dramatic revolution in American families. Family size continued its long-term decline, the schooling of older children expanded dramatically and the proportion of married females’adulthood devoted to market-oriented activities increased. Over this same period there were signi…cant reductions in mortality, especially among the young, and impressive reductions in morbidity. This paper considers all these trends jointly, modeling the changes in fertility, child schooling and lifetime married female labor supply as a consequence of exogenous changes in health. These interactions are then quanti…ed using calibration techniques. The simulations suggest that reductions in child mortality alone cannot explain the transformation of the American family. Indeed, in our preferred calibration, reductions in child mortality lead to a modest decline in human capital and increase in fertility, with little e¤ect on married female labor force involvement. In sharp contrast, reductions in morbidity are found to lower fertility and increase education. The time savings from lower fertility more than o¤set the increased time mothers invest in their childrens’quality, freeing some time for market work. However, lower fertility alone cannot account for the increase in market work of married women. In our framework, the majority of the increase is a consequence of a narrowing of the gender wage gap. More generally, viewing the implications of health improvements deepens our understanding of the American family transformation, complementing explanations based on skill biased technical change and improvements in household durable goods. Keywords: Schooling, Fertility, Health, Human Capital Accumulation, Labor Supply. JEL classi…cation Numbers: D1, J13, I21, I10, J24, J22, N3. Matthias Cinyabuguma, Christelle Viauroux and Bill Lord are Assistant Professors and Professor of Economics at UMBC, Economics Department. Please, address questions and comments to [email protected], [email protected], and [email protected]. We thank Peter Rangazas and participants at the 2009 Cliometric Society meeting for valuable comments.