This paper uses rich administrative population-wide data from Sweden to examine the causal effects of infertility on individual well-being, labor market outcomes, and couple stability. Using quasi-random variation in the likelihood of fertility treatment success, we find that involuntary infertility leads to substantial deterioration of mental health and couple stability, with no impact on long-run labor market outcomes. Using sharp age cutoffs in public insurance coverage of IVF treatments, we show that insurance substantially increases the use of expensive infertility treatments, especially among lower-income households. We argue that households are responsive to insurance due to a liquidity effect rather than only traditional moral hazard. We discuss the implications for the role of public subsidies for infertility treatments in allocating additional children across the socioeconomic spectrum.

This talk is presented by the Labor Economics Seminar, sponsored in part by the Department of Economics with generous gifts given through the Abraham and Thelma Zwerdling Labor Economics Program.