Beiträge zur Jahrestagung des Vereins für Socialpolitik 2015: Ökonomische Entwicklung - Theorie und Politik - Session: Children 2 F07-V3
Teenage birth rates differ significantly across developed countries. They are higher in countries with high income inequality and low intergenerational income mobility. We develop an economic theory of parental investments and risky sexual behavior of teenagers. The model is calibrated to match the stylized facts about income inequality, intergenerational mobility, and sexual behavior of teenagers in the United States. We then impose Norwegian taxes and education spendings on the baseline model. The Norwegian welfare state institutions go a long way in explaining the differences in teenage birth rates between the United States and Norway.