The Costs of Teenage Out-of-Wedlock Childbearing: Analysis with a Fixed-Effect Propensity Score Matching Estimator

Teen out-of-wedlock mothers have lower education and earnings than peers who have children later. This study uses the National Educational Longitudinal Survey of 1988 (NELS) to examine the extent to which the apparent effects of out-of-wedlock teen fertility are not causal, but are due to pre-existing disadvantages of the young women and their families. We use a novel fixed-effect matching method to study this problem. We find that mothers-to-be were substantially disadvantaged before their teen out-of-wedlock fertility. At the same time, we cannot rule out that out-of-wedlock fertility reduces education substantially, although far less than the cross-sectional comparisons of means suggest. Acknowledgment: Paul Gertler and Bryan Lincoln were quite helpful. The second author will make code available to interested replicators. 1 Our most serious social problem [is] the epidemic of teen pregnancies and births where there is no marriage. -President Clinton, 1995 State of the Union Address While teen mothers are very likely to live in poverty and experience other forms of adversity, our results imply that little of this would be changed just by getting teen mothers to delay their childbearing into adulthood. -Hotz, Sanders and McElroy, 1999 As the authors of both of the quotations above agree, teen mothers have lower average education and earnings than peers who have children later. At the same time, several studies find that much of the apparent bad effects of teen parenthood are not causal (Geronimus and Korenman, 1992 and 1993; Hotz, Mullin, and Sanders, 1997, Hoffman, et al., 1993a, b; Hotz, Sanders and McElroy, 1999). That is, most teen mothers were disadvantaged before motherhood. On average, if these young mothers had delayed childbearing, it would not have avoided all the poor outcomes for themselves or their children. A key question is how much (if any) of the correlations are causal. Surprisingly, some analyses cannot reject that none of the disadvantage of teen mothers is due to young motherhood; it is perfectly possible that all the many disadvantages appear to be due to pre-existing disadvantages. This study uses the National Education Longitudinal Survey (NELS) of 1988 to examine how much of the links between teen out-of-wedlock fertility and the young mothers= poor outcomes could have been predicted using pre-motherhood characteristics of the young women. We examine these issues using both parametric methods and a novel fixed-effects semi-nonparametric method based on matching. Theory and Methods The vast literature on teen pregnancies, as well as previous research with the NELS dataset we examine here, leads us to believe that young women who will become teen out-of-wedlock mothers had low observable predictors of their outcomes prior to their first childbirth. Moreover, in part due to these