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(Why) Do Self-Employed Parents Have More Children?

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  • Nzinga Broussard
  • Ralph Chami
  • Gregory Hess

Abstract

We provide a theory whereby non-benevolent, self-employed households increase their expected family size to raise the likelihood that an inside family member will be a good match at running the business. Hence, having larger family sizes raises the self-employed household’s expected return to their business. Using data from the General Social Survey, we find that respondents have approximately .2 to .4 more actual and expected number of children if they are self-employed as compared to if they are not self-employed. This empirical relationship is established across a broad array of sub-samples using a simple differences in means test. As well, the empirical relationship holds using a regression framework, including the use of instrumental variables estimation to allow for the possibility of endogeneity of the respondent’s self-employment status and whether the respondent’s spouse stays at home.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1103.

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Date of creation: 2003
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Handle: RePEc:ces:ceswps:_1103

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Keywords: self-employed; children; familiy business; matching;

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References

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  1. David G. Blanchflower, 2000. "Self-Employment in OECD Countries," NBER Working Papers 7486, National Bureau of Economic Research, Inc.
  2. Barro, Robert J & Becker, Gary S, 1989. "Fertility Choice in a Model of Economic Growth," Econometrica, Econometric Society, Econometric Society, vol. 57(2), pages 481-501, March.
  3. Altig, David & Davis, Steven J, 1992. "The Timing of Intergenerational Transfers, Tax Policy, and Aggregate Savings," American Economic Review, American Economic Association, American Economic Association, vol. 82(5), pages 1199-220, December.
  4. Shleifer, Andrei & Summers, Lawrence H. & Bernheim, B. Douglas, 1986. "The Strategic Bequest Motive," Scholarly Articles 3721794, Harvard University Department of Economics.
  5. Willis, Robert J, 1973. "A New Approach to the Economic Theory of Fertility Behavior," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 81(2), pages S14-64, Part II, .
  6. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," NBER Working Papers 1942, National Bureau of Economic Research, Inc.
  7. Ralph Chami & Gregory D. Hess, 2002. "For Better or For Worse? State-Level Marital Formation and Risk Sharing," CESifo Working Paper Series 702, CESifo Group Munich.
  8. Rosenzweig, Mark R & Schultz, T Paul, 1985. "The Demand for and Supply of Births: Fertility and Its Life Cycle Consequences," American Economic Review, American Economic Association, American Economic Association, vol. 75(5), pages 992-1015, December.
  9. Arnott, Richard & Stiglitz, Joseph E, 1991. "Moral Hazard and Nonmarket Institutions: Dysfunctional Crowding Out or Peer Monitoring?," American Economic Review, American Economic Association, American Economic Association, vol. 81(1), pages 179-90, March.
  10. Jie Zhang & Junsen Zhang, 1997. "Fertility and Wage Rates in an Overlapping-Generations Model," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 30(1), pages 224-34, February.
  11. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 16(1), pages 26-60, January.
  12. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(3), pages 604-631, June.
  13. Appelbaum, Elie & Katz, Eliakim, 1991. "The Demand for Children in the Absence of Capital and Risk Markets: A Portfolio Approach," Oxford Economic Papers, Oxford University Press, vol. 43(2), pages 292-304, April.
  14. Gregory D. Hess, 2004. "Marriage and Consumption Insurance: What's Love Got to Do with It?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 112(2), pages 290-318, April.
  15. Bruno Frey & Matthias Benz, 2003. "Being Independent is a Great Thing: Subjective Evaluations of Self-Employment and Hierarchy," CESifo Working Paper Series 959, CESifo Group Munich.
  16. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," Journal of Human Resources, University of Wisconsin Press, vol. 21(4), pages 485-506.
  17. Chris Robinson & Nigel Tomes, 1982. "Family Labour Supply and Fertility: A Two-Regime Model," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 15(4), pages 706-34, November.
  18. Fairlie, Robert, 2014. "Ethnic and Racial Self-Employment Differences and Possible Explanations," Santa Cruz Department of Economics, Working Paper Series qt24p7v6gc, Department of Economics, UC Santa Cruz.
  19. Leung, Siu Fai, 1991. "A Stochastic Dynamic Analysis of Parental Sex Preferences and Fertility," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 106(4), pages 1063-88, November.
  20. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 95(3), pages 508-46, June.
  21. Schultz, Theodore W, 1973. "The Value of Children: An Economic Perspective," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 81(2), pages S2-13, Part II, .
  22. Robert W. Fairlie & Bruce D. Meyer, 2000. "Trends in Self-Employment among White and Black Men during the Twentieth Century," Journal of Human Resources, University of Wisconsin Press, vol. 35(4), pages 643-669.
  23. Stanley Friedlander & Morris Silver, 1967. "A quantitative study of the determinants of fertility behavior," Demography, Springer, Springer, vol. 4(1), pages 30-70, March.
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Citations

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Cited by:
  1. David G. Blanchflower, 2008. "Minority Self-Employment in the United States and the Impact of Affirmative Action Programs," NBER Working Papers 13972, National Bureau of Economic Research, Inc.
  2. Blanchflower, David G. & Oswald, Andrew J., 2007. "What Makes a Young Entrepreneur?," IZA Discussion Papers 3139, Institute for the Study of Labor (IZA).
  3. Blanchflower, David G., 2007. "Entrepreneurship in the United States," IZA Discussion Papers 3130, Institute for the Study of Labor (IZA).
  4. Blanchflower, David G. & Shadforth, Chris, 2007. "Entrepreneurship in the UK," Foundations and Trends(R) in Entrepreneurship, now publishers, now publishers, vol. 3(4), pages 257-364, July.
  5. LaLumia, Sara, 2009. "The Earned Income Tax Credit and Reported Self-Employment Income," National Tax Journal, National Tax Association, vol. 62(2), pages 191-217, June.

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