Differential Fertility, Human Capital, and Development

Discussions of cross-sectional fertility heterogeneity and its interaction with economic growth typically assume that the poor have more children than the rich. Micro-data from 48 developing countries suggest that this phenomenon is very recent. Over the second half of the twentieth century, these countries saw the association of economic status with fertility and the association of the number of siblings with their education flip from generally positive to generally negative. Because large families switched from investing in more education to investing in less, heterogeneity in fertility across families initially increased but now largely decreases average educational attainment. While changes in GDP per capita, women?s work, sectoral composition, urbanization, and population health do not explain the reversal, roughly half of it can be attributed to the rising aggregate education levels of the parent generation. The results are most consistent with theories of the fertility transition based on changing preferences over the quality and quantity of children, and somewhat less so with theories that incorporate subsistence consumption constraints.