The Butz-Ward Fertility Model in the Light of More Recent Data

Abstract

In this study, the Butz and Ward (B-W) estimates from their article, "The Emergence of Countercyclical U.S. Fertility" (1979), are updated using their original sources, and then compared against data drawn from the March Current Population Survey (CPS). The results indicate little similarity between the original B-W estimates of the female hourly wage, and the CPS time series. In particular, the CPS time series show that much of the "dramatic increase" in the female hourly wage in the 1960s as estimated by B-W, resulted from the use of a sharply downward trending series in average hours worked in retail-which contradicts the actual pattern for married women. Estimates of the B-W model using the new CPS series don't work, either in terms of signs or in significance of variables. In addition, even using the original B-W data their model no longer fits in the period after about 1954. These results, seen in the context of more recent work, suggest the need for a more general framework for testing the New Home Economics model of fertility-a framework which allows at least for a changing income effect of the female wage-and a need for more caution in assuming that we are witnessing an emergence of countercyclical fertility.

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