Question

Question 5. Set up the game for AYK model for bargaining and explain how access to abortions changes the Nash equilibrium and we would observe an increase in nonmarital fertility in the society.

Answer 1

In a well-known paper, Akerlof, Yellen, and Katz proposed a counter-intuitive explanation for the rise of non-marital births in the U.S. that emphasized how birth control and abortion weakened the responsibility of men to their unmarried partner's pregnancy. The paper is regularly cited by social conservatives to support measures to restrict sex education and access to contraception and abortion. argue that this use of the paper's findings stems from specific modeling assumptions about types of women. I present a reformulation of the model using more reasonable types that generates precisely the same results, but with radically different policy implications.

In a famous and widely-cited article, Akerlof, Yellen, and Katz (1996) proposed a novel explanation of the increase in the proportion of births that were non-marital among U.S. women in the late 20 century. Most prior research had emphasized economic incentives in the form of overly generous welfare benefits (Murray 1984) and/or the relatively bleak marriage market prospects facing some women, especially those in minority communities (Wilson 1987), for empirical efforts to assess these arguments, see Duncan and Hoffman (1990), Moffitt (1992), and Lundberg and Platnick (1995) Akerlof, Yellen, and Katz (hereafter, AYK) correctly noted the weak explanatory power of these explanations and instead, emphasized a change in the social norm concerning the responsibility of a single male to the unplanned pregnancy of his unmarried partner APK presented a theoretical model of the negotiation process between single men and women about pre-marital sex and the man's responsibility in the event of a pregnancy and then showed how those negotiations and the resulting social norm plausibly changed with the introduction of more reliable temale-controlled contraceptives (le, the pill) in the 1960s and the legalization of abortion in 1973. In the AYK model, contraception and abortion counterintuitively increased the proportion of births that are non-marital by reducing male commitment via Shotgun marriage to a pregnant partner.

The policy implications of this model have had a very curious life. AYK are very specific that an attempt to turn the technology clock backward .would almost surely be both undesirable and counterproductive . But despite this, their paper is regularly cited in conservative policy writing as support for doing exactly that. For example, social conservatives have used the article and its conclusions as evidence in support of Catholic teachings on restricting access to contraceptives,abortion, and sex education, see, for example, Wilcox (2005) and Eberstadt (2013). The article is also prominently cited by abstinence-focused advocacy groups; see, for example, testimony by the Executive Director of the Abstinence & Marriage Education Partnership opposing a sex-education bill in the Illinois State Legislation (Phelps March 13, 2013), recent conservative critique in The National Review of the Affordable Care Act for its coverage of FDA-approved contraceptives (New February 15, 2013).

In the AK model, single men and women involved in a romantic relationship engage in strategic bargaining over whether to have pre-marital sex and the man's responsibility to his partner in the event of a pregnancy, Women are assumed to act first by choosing one of three strategies.

1) declining to have sex before marriage;

2) having sex, but only after extracting a (shot-gun) marriage promise in the event of a pregnancy, and

3) having sex, but without a marriage promise.

Men can accept those terms or they can reject them. If they reject the demand, the relationship ends and each party then search for another partner in the next time period who will offer or accept terms more to his/her liking.

The bargaining is modelled using game theory to identify the payoffs to each party of any pair of strategies. Equilibrium-a social norm-exists when both men and women are choosing strategies that are optimal, given the optimal choices of the other party, and thus, where, no change in strategy can improve either party's well-being Intuitively, if most women demand a marriage promise, then men will likely accept it, because the alternative is to continue searching for a partner in an environment Technically, this describes a Nash equilibrium.

which most other women also demand a marriage promise, in that case, the value to the men of a future relationship is likely to be no better than the current one and the reject strategy is inferior since it involves the lass of the current relationship and bearing search costs. Conversely, if most women do not demand a marriage promise, then men will not accept one if the woman they are involved with makes one, since they are confident that they can find a partner who will not make such a demand They will, therefore, be better off, even net of search costs, by rejecting the demand. Women, knowing that will not make a marriage demand, because they understand that they will be unlikely to find a better partner in the next time period.

Increase in non-martial fertility in the society:

• Rising rates of nonmarital fertility are intricately linked to socioeconomic stratification. On one hand, women of lower socioeconomic status (SES) are more likely to have children outside marriage. On the other, children born outside of marriage fare worse on numerous developmental indicators than their peers, disrupting their own eventual socioeconomic attainment.
• In this way, nonmarital fertility is a channel for the intergenerational transmission of socioeconomic inequality. Unpacking this transmission is important to current policy initiatives targeting nonmarital fertility and its relation to family poverty and child well-being.
• Nonmarital fertility through the prism of the linked lives of mothers and children within larger social structures. This framework considers a nonmarital birth to be one point on women’s fertility/relationship trajectories, children’s transitions into formal schooling to be one point on their educational trajectories, and race/ethnicity and immigration status to be cultural meaning systems and opportunity structures in which maternal and child trajectories connect. Specifically, we use nationally representative data on children—the Early Childhood Longitudinal Study-Kindergarten Cohort (ECLS-K)—to estimate associations of children’s early school achievement with their family arrangements at that point and at birth. Further, we examine how these associations vary across four race/ethnic populations (Whites, African Americans, native-born Latino/as, and Mexican immigrants) with well-documented differences in the prevalence and meaning of nonmarital fertility.