Are Children Really Inferior Goods? Academic Article uri icon

abstract

  • This paper explores the causal link between income and fertility by analyzing women's fertility response to the large and permanent income shock generated by a husband's job displacement. I find that the shock reduces total fertility, suggesting that the causal effect of income on fertility is positive. A model that incorporates the time cost of children and assortative matching of spouses can simultaneously explain this result and the negative cross-sectional relationship. I also find that a husband's displacement accelerates childbearing, which is consistent with lifecycle models of fertility in which the incentive to delay is driven by expected earnings growth. © 2010 by the Board of Regents of the University of Wisconsin System.

altmetric score

  • 10.5

author list (cited authors)

  • Lindo, J. M.

citation count

  • 5

publication date

  • March 2010