In High School and Pregnant: The Importance of Educational and Fertility Expectations for Subsequent Outcomes

I. INTRODUCTION After an almost 40% decline in the incidence of teenage childbearing in the United States over a period of 15 consecutive years, the number of children born to adolescent mothers rose for the first time in 2005 (Hamilton, Martin, and Ventura 2007). With a number of high profile celebrity teenage pregnancies (Gully 2008), and a recent widely publicized case of a high school pregnancy pact (Kingsbury 2008), our nation's attention is once again drawn to the issue of adolescent childbirth and its impact on the young mother's future. This study finds that although the negative effect of a high school pregnancy on subsequent educational and earnings outcomes appears particularly large for young women from poor socioeconomic environments, it can almost fully be explained by preexisting low educational expectations and early fertility expectations, rather than by difficulties in coping with unplanned parenthood. Over three decades ago, researchers first reported a large negative effect of early child-bearing on the educational attainment of women (Waite and Moore 1978). In a wealth of subsequent studies, adolescent mothers were found to compare unfavorably to women who delay childbearing along a wide range of measures of economic well-being, from high school completion, to postsecondary educational attainment, to labor market employment and earnings. However, the difficulty with interpreting these associations between early childbirth and poor subsequent outcomes lies in the fact that the timing of childbearing is clearly nonrandom. In particular, women from poor socioeconomic backgrounds are likely to have low educational expectations and low expected labor market earnings (Trent 1994; Trusty 1998); thus, facing a relatively low opportunity cost of childbearing, they may choose to have a child earlier or to be more likely to engage in behaviors that may lead to an unwanted pregnancy (McCrate 1992). Women with high educational expectations and a high opportunity cost of childbirth, on the other hand, may be less likely to become pregnant; furthermore, given that 40% of unwanted pregnancies in the United States are terminated (Finer and Henshaw 2006), these women may be more likely to terminate a pregnancy if one were to occur. As educational and fertility expectations are private information that is not directly observable to the researcher, previous studies have employed a number of ways of accounting for the endogeneity of fertility timing, such as controlling for observable socioeconomic and demographic characteristics, using the siblings of adolescent mothers as the comparison group, and exploiting natural experiments like twin births and miscarriages (see Hotz, McElroy, and Sanders 2005 for a review of the literature). Hotz, McElroy, and Sanders (2005) carried out arguably the most convincing study of the causal impact of teenage childbearing. In their study, they showed that long-term outcomes of women whose teenage pregnancy ends in a miscarriage, instead of a live birth, are nevertheless very similar to outcomes of teenage mothers, thus suggesting that teenage childbirth itself has a few long-term negative consequences. In this article, we come to a similar conclusion by using the educational and fertility expectation data for young women from the Sophomore Cohort of the High School and Beyond (HS&B) study (1980-1992) to explicitly account for the endogeneity of fertility timing. This approach is motivated by economic theory. If young women behave optimally and form rational expectations over their future fertility, education, and labor market outcomes, then measuring these expectations prior to childbirth should capture all relevant unobservable private information. Consequently, examining how fertility and educational expectations differ between adolescent mothers and women who delay childbearing can help explain why Hotz, McElroy, and Sanders (2005) did not find any causal effect of childbirth on subsequent educational and labor market outcomes despite the wealth of statistical evidence of the relationship. …