Sinclair Davidson is a bit puzzled by cross sectional variation in the paper I noted a few days ago. The paper suggests that stigmatization of pre-marital sex had a lot to do with the costs of raising children out of wedlock and the incidence of those costs; since churches are no longer largely liable for the costs of the orphanarium, mainline protestant church prohibitions on premarital sex have declined over time. Davidson then is puzzled by the current cross sectional variation, where the incidence of premarital sex and out of wedlock births are higher for the lower deciles, who potentially have to pay a greater proportion of income to raise an out-of-wedlock child.
I'd argue to the contrary. Think of the game as follows. At time t, you choose whether to engage in premarital sex. If so, there's probability p of an unwanted pregnancy. The female bears those costs with certainty; the male, only probabilistically. At time t+1, you marry, and there's a chance of getting a high quality or a low quality spouse. If you're in a high decile, you're more likely to get a high quality spouse. If you have a prior child (or child support payment encumbrances) from time t, you're less likely to get a high quality spouse. If your chances of getting a high quality spouse at time t+1 are sufficiently low (because you're low decile), then the lifetime costs of having an out of wedlock birth at time t are lower. Cross-sectional variation explained!
