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Does fertility decrease household consumption?

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Author Info

  • Jungho Kim

    (Korea Development Institute)

  • Henriette Engelhardt

    (Otto-Friedrich-Universität Bamberg)

  • Alexia Prskawetz

    (Vienna University of Technology)

  • Arnstein Aassve

    (Universita Bocconi, Milano)

Abstract

This paper presents an empirical analysis of the relationship between fertility and a direct measure of poverty for Indonesia, a country, which has experienced unprecedented economic growth and sharp fertility declines over recent decades. It focuses on illustrating the sensitivity of the effect of fertility on household consumption with respect to the equivalence scale by applying the propensity score matching method. The analysis suggests that a newborn child decreases household consumption per person by 20 percent within four years. When the estimates of equivalence scales implied by the Indonesian sample are applied, the effect of a child on household consumption is still negative, but the magnitudes are in the range from 20 to 65 percent of that found with the per-capita expenditure as a measure of consumption. Therefore, it is suggested that the analysis based on the conventional measure of poverty is likely to exaggerate the effect of fertility on poverty at least because of the neglect of the proper equivalence scale.

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Bibliographic Info

Article provided by Max Planck Institute for Demographic Research, Rostock, Germany in its journal Demographic Research.

Volume (Year): 20 (2009)
Issue (Month): 26 (June)
Pages: 623-656

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Handle: RePEc:dem:demres:v:20:y:2009:i:26

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Web page: http://www.demogr.mpg.de/

Related research

Keywords: consumption; equivalence scale; fertility; Indonesia; poverty dynamics;

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References

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