Do Couples Bargain over Fertility ?
Neoclassical theory predicts that opportunity costs depress fertility. This view may be oversimplifying. In a household bargaining framework, wages also affect the intra-household distribution and, thus, the investment in household public goods like children. We demonstrate in a standard collective model the interplay of child preferences with opportunity cost and bargaining power effects. Theory provides the seemingly counter-intuitive result that, under certain conditions, female wages can increase fertility. In the empirical analysis, we present results consistent with the prediction that for couples with discordant child preferences bargaining power affects fertility choices.
Volume (Year): (2015)
Issue (Month): 117-118 ()
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