From Shame to Game in One Hundred Years: An Economic Model of the Rise in Premarital Sex

1. by J. Fernandez Villaverde, J. Greenwood and N. Guner Discussion by: Alessandra Fogli From Shame to Game in One Hundred Years: An Economic Model of the Rise in Premarital Sex Minneapolis, November 2009

2. Two objectives • Provide a quantitative model of the large change in sexual behavior and out of wedlock birth of the last century. • Argue that technology drives culture

3. The plan • Some intuition on the mechanisms of the model • Is technology really driving everything?

4. The first objective • Rise in premarital sex of teens over the century • Rise and then decrease of out of wedlock birth • Cross sectional facts: poor versus rich • Hypothesis: These changes are driven by technology, i.e. better contraception

5. The model in a nutshell • One decision: to have premarital sex or not fraction having sex out of wedlock births • If sex becomes safer ( ) Need assumptions on σ(elasticity of F). Assume

6. Results from simple model

7. Key findings: time series • Main results can be obtained without socialization • Both models (with and without socialization) have problems generating large increase in sex and owb (sexual revolution) • Results crucially hinges on the shape of the distribution of joy of sex. This is unobservable. Some empirical work would be useful to impose discipline. • In the model owb are sex times failure rate. In the data fewer out of wedlock births (shotgun marriages? Akerlof, Yellen and Katz, QJE1996)

8. What about the cross section? • Poor women have more sex and owb • What about the change over time?

9. Results from the simple model The expected cost for rich decreases more (larger T), larger increment in sex Negative effect of safety larger for poor who had more owb to start with

10. Technology only drive • A change in technology can explain the facts • Culture lags and is driven by technology • Deeper message of the paper: Technology is everything. No independent role of culture

11. Has culture been given a fair shot? Empirically: argue that attitudes lag behavior • Average attitudes always lag when change first happens in younger cohorts. • This would also happen had young cohorts changed their behavior for cultural reasons (rock music).

12. Has culture been given a fair shot? Theoretically: model the role of parents’ socialization Parents are not altruistic, they have their “own agenda” • The expected cost from sex: • Now let the cost be : • πis a function of culture • T can be also a function of culture

13. What is technology in the model? • In the model, technology is captured by failure rate, π • product of adoption decision (λ) and rate of effectiveness (δ) • changes in λ are NOT exogenous changes in technology but endogenous changes in behavior.

14. Most of the change in π comes from λ

15. Large variation in λ across socio-econ groups

16. Technology driven by culture? • Changes in adoption rates and differences across groups may be explained by evolution of preferences and beliefs: • Women face uncertainty when making adoption decisions and form beliefs on expected benefits and costs. • diffusion of information over time and across groups • and/or coordination motives can generate persistent differences. But this is Culture!

17. Unexplored roles for culture • Can T (the cost of owb) be changing over time ? • Can it be culturally determined (independent from π) ? • Change in illegitimacy laws changes cost on the child • Coordination motives: can lead to large change in behavior in response to small shocks (rock music?) • Value of virginity in marriage market

18. Large differences in owb by race

19. Another possible story… • Large change in women’s role in society: sex only one dimension • As women become more educated and economically independent, they have more sex and demand more and better contraception. Culture can affect technology