Are children 'normal'?
AbstractIn his classic work on the economics of fertility, Becker (1960) suggests that children are likely “normal.” We examine this contention. Our first step is documenting an empirical regularity about the cross section of white married couples in the U.S.: when we restrict comparisons to households living in broadly similar locations (e.g., in expensive urban areas, or in rural areas), completed fertility is positively correlated with the husband’s income. Two alternative models rationalize the data—one in which children are “normal” and a second in which the observed pattern emerges solely as a consequence of rational sorting by households. In an effort to sort out causal effects, we undertake a rather specialized empirical exercise to analyze the localized impact on fertility of the mid-1970s increase in world energy prices—an exogenous shock that substantially increased men’s incomes in the Appalachian coal-mining region. We find that children are indeed “normal.”
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Bibliographic InfoPaper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 2008-040.
Date of creation: 2009
Date of revision:
Other versions of this item:
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-11 (All new papers)
- NEP-ENE-2008-11-11 (Energy Economics)
- NEP-HPE-2008-11-11 (History & Philosophy of Economics)
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