The role of economic incentives in teenage nonmarital childbearing choices

In this paper, we explore whether behaviors of youths that are likely to result in a teen nonmarital birth event are influenced by their expectations of the net economic benefits or costs associated with the occurrence of such a birth. We posit and find that an increase in the perceived costs associated with the occurrence of a nonmarital birth would lead to a reduction in these risky behaviors, and to a lower probability of a nonmarital birth event. We represent these economic incentives by the income expectations of young women conditional on either giving birth as an unmarried teen or forgoing childbearing while unmarried and an adolescent. We also measure the effects of an extensive list of other factors, including the characteristics of the girl's family and its choices, the social and economic environment in which she lives (including policy-related factors, such as expenditures by states on family-planning programs and the generosity of Aid to Families with Dependent Children) and her own prior choices. (C) 2001 Elsevier Science BY All rights reserved.