Horizontal vs. Vertical Transmission of Fertility Preferences

I study the cultural transmission of fertility preferences among second generation immigrant women observed in U.S. Censuses from 1910 to 1970. As hypothesized by Bisin & Verdier (2001), the transmission of preferences can be "vertical" or "horizontal." Using a unique source documenting the variation in fertility behavior in Europe before and after the first demographic transition (1830-1970), I unpack the influence of parents (measured by source-country fertility at the time of departure from Europe) versus the influence of peers (measured by fertility of the same-age cohorts living in the source country and transmitted by same-age recent immigrants). I find that the transmission mechanism is crucially affected by the number of foreign born immigrant peers living in the same MSA. On one hand, the "vertical" channel of transmission is stronger in places where there are few newly arrived foreign born immigrant couples from the same source countries. On the other hand, fertility choices of second generation women are strongly correlated with marital fertility choices measured over peer cohorts in the source countries whenever they live in MSAs densely populated by recently arrived immigrants