Transition to Parenthood: The Role of Social Interactions and Endogenous Networks

Belinda Aparicio Diaz, Vienna Institute of Demography
Thomas Fent, Vienna Institute of Demography

This paper investigates how the decision of having an additional child is influenced by an individual's peer group. We show via agent based simulations how social interaction creates interdependencies in the individual transition to parenthood and its timing. We build a one-sex model and provide agents with four different characteristics. Based on these characteristics agents endogenously form their network. Network members then may influence the agents’ transition to higher parity levels. The agents compare the share of agents with a higher parity than their own within their peer group with the same share on the aggregate level. Our numerical simulations indicate that accounting for social interactions is important to explain the shift of first birth probabilities in Austria over the period 1984 to 1994.