This paper borrows from the tradition of other social sciences in considering the impact that
“culture” (broadly defined as the economic and social environment in which the poor live) plays
in determining early, non-marital childbearing. Along with others before us, we hypothesize that
the despair and hopelessness that poor, young women may face increases the likelihood that they
will give birth at an early age outside of marriage. We derive a formal economic model that
incorporates the perception of economic success as a key factor driving one’s decision to have an
early, non-marital birth. We propose that this perception is based in part on the level of income
inequality that exists in a woman’s location of residence. Using individual-level data from the
United States and a number of other developed countries, we empirically investigate the role
played by inequality across states in determining the early childbearing outcomes of low
socioeconomic status (SES) women. We find low SES women are more likely to give birth at a
young age and outside of marriage when they live in higher inequality locations, all else equal.
Less frequent use of abortion is an important determinant of this behavior. We calculate that
differences in the level of inequality are able to explain a sizeable share of the geographic
variation in teen fertility rates both across U.S. states and across developed countries.