The Economist explains

How fracking leads to babies

An uptick in economic output boosts fertility rates

By S.K.

THE typical family in America is changing. Couples are increasingly reluctant to seal their relationships with the stamp of marriage, or to tie the knot before having children. In 1960 fewer than a tenth of births were to unmarried women, whereas these days around two fifths of children are born out of wedlock. Economists wonder whether the changing economic fortunes of men might be driving these decisions, but struggle to disentangle the different factors at work. Recently, though, new evidence has emerged on the topic. Did, for example, the fracking boom affect family formation?

It seems plausible that someone might be reluctant to marry a person with poor or worsening economic prospects. And babies are expensive; to an economist, the idea that people might be more likely to have one when they get richer is a natural one. There is some historical evidence to support both hypotheses. In response to the Appalachian coal boom of the 1970s and 1980s, marriage rates went up, as did the share of babies born to married couples. More recently, a study by David Autor, David Dorn and Gordon Hanson, three economists, found that people exposed to import competition from China over the 1990s and 2000s took a hit to their “marriage-market value”. The negative shock seemed to turn people off marriage and children.

A new study by Melissa Kearney and Riley Wilson, two economists at the University of Maryland, looks at the impact of the recent fracking boom in America, which boosted job opportunities for less-educated men. The economists wanted to see how this affected birth rates, both in and outside of marriage. They compared marriage and birth rates in areas where fracking had boosted the local economy with those where it had not had any effect. The researchers found no effect on marriage rates, though fertility rates did rise. On average, they find that $1,000 of extra fracking production per person was associated with an extra six births per 1,000 women.

The result confirms the hypothesis that better economic prospects lead to higher fertility. But it also sheds light on changing social mores in America: good times used to mean more wedding bells and babies, whereas now they just mean the latter. The policy prescriptions are not obvious. Whether or not people get married is their own business. But the finding does offer some comfort to those who worry that declining marriage rates are purely the product of worsening economic prospects for men. Clearly, some other factor is at play.

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