Optimal life-cycle fertility in a Barro-Becker economy.

Parenthood postponement is a key demographic trend of the last three
decades. In order to rationalize that stylized fact, we extend the canonical model
by Barro and Becker (Econometrica 57:481–501, 1989) to include two—instead of
one—reproduction periods.We examine how the cost structure of early and late children
in terms of time and goods affects the optimal fertility timing. Then, we identify
conditions that guarantee the existence and uniqueness of a stationary equilibrium
with a stationary cohort size. Finally, we examine how the model can rationalize the
observed postponement of births, and we highlight two plausible causes: (1) a general
rise in the cost of children in terms of goods and (2) a decline in the degree of
family altruism.