Identifying the Consequences of Teenage Childbearing

This paper continues research on female labor supply, in particular the literature on the costs of childbearing to a woman’s later labor market and marital outcomes. Hotz, Mullin, and Sanders (1997) use miscarriage as an instrument for birth, concluding that delaying birth might actually worsen outcomes for pregnant teenage girls. I demonstrate that while miscarriages might be randomly assigned given a woman’s smoking, drinking, and contraceptive behavior, observed miscarriages are still not a valid instrument. It turns out that more than one out of every two women wanting the pregnancy to end in an abortion will never have an assigned miscarriage, and this likely creates a bias that underestimates the true costs of teenage childbearing. I consider various estimators that correct the IV estimates for this censoring problem and employ a data set better suited to measure pregnancy outcomes – the 1995 National Survey of Family Growth. After implementing these new estimators, I find in contrast to the existing literature that that teenage childbearing significantly reduces the probability of high school completion, but only for girls in high school. Moreover, there is some evidence of a causal link between teenage childbearing and labor market outcomes and weak evidence of a link to marital outcomes later in life.