In 1991 two researchers, A. T. Geronimus and S. Korenman, startled many researchers and policymakers with findings that early childbearing was not as devastating to the socioeconomic lives of teen mothers as was long perceived. By using "fixed-effects methodology" and comparing socioeconomic outcomes for sisters who had first births at different ages (with data from the 1982 National Longitudinal Survey of Young Women), Geronimus and Korenman concluded that teenage childbearing has little socioeconomic consequences and that the negative effects of teenage childbearing primarily reflect unmeasured family background rather than the true consequences of teen birth. The purpose of this study was to attempt to replicate the above findings using data from the longitudinal survey: the Panel Study of Income Dynamics (PSID).

The PSID is a national survey of American families conducted since 1968 by the Institute for Social Research. The 1968-1987 PSID family-individual files provide up to 20 years of annual demographic and socioeconomic information for all individuals in the original sample of approximately 5,000 households. The PSID oversampled poor families, but when weighted to reflect the initial sampling probabilities and subsequent attrition, the data are nationally representative.

The statistical technique known as fixed-effects model can be employed to analyze parts of these data. Initially used for analyses of repeated observations over time, this technique accounts for individual-specific effects that are unobserved but fixed across repeated observations. The fixed-effects model frequently has been applied to the analysis of siblings but until recently was not used to analyze the socioeconomic consequences of teenage childbearing.