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Children as insurance


  • Claus Chr. Pörtner

    () (University of Copenhagen, Institute of Economics, Studiestraede 6, 1455 Copenhagen K, Denmark)


This paper presents a dynamic model of fertility decisions in which children serve as an incomplete insurance good. The model incorporates uncertainty about future income and the survival of children as well as a discrete representation of the number of children. It contributes to the understanding of the negative relation between fertility and education, shows why parents may demand children even if the return is negative, and explains why fertility might rise with increasing income when income is low and decrease when income is high. Furthermore, the model can account for the decline in fertility when the risk of infant and child mortality decreases. Finally, the implications for empirical tests of the demand for children are also examined.

Suggested Citation

  • Claus Chr. Pörtner, 2001. "Children as insurance," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(1), pages 119-136.
  • Handle: RePEc:spr:jopoec:v:14:y:2001:i:1:p:119-136
    Note: Received: 8 September 1998/Accepted: 9 June 1999

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    References listed on IDEAS

    1. Lundberg, Shelly & Pollak, Robert A, 1993. "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 988-1010, December.
    2. Muthoo, Abhinay, 2004. "A model of the origins of basic property rights," Games and Economic Behavior, Elsevier, vol. 49(2), pages 288-312, November.
    3. Francois, Patrick, 1998. "Gender discrimination without gender difference: theory and policy responses," Journal of Public Economics, Elsevier, vol. 68(1), pages 1-32, April.
    4. Steinar Vagstad, 2001. "On private incentives to acquire household production skills," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(2), pages 301-312.
    5. Sylvain E. Dessy & Stephane Pallage, 2009. "Gender Discrimination, Human Capital and Marriage," Journal of African Development, African Finance and Economic Association, vol. 11(1), pages 61-76.
    6. Pierre-Andre Chiappori & Bernard Fortin & Guy Lacroix, 2002. "Marriage Market, Divorce Legislation, and Household Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 37-72, February.
    7. Kai A. Konrad & Kjell Erik Lommerud, 2000. "The bargaining family revisited," Canadian Journal of Economics, Canadian Economics Association, vol. 33(2), pages 471-487, May.
    8. Imran Rasul, 2006. "The Economics of Child Custody," Economica, London School of Economics and Political Science, vol. 73(289), pages 1-25, February.
    9. Shelly Lundberg & Robert Pollak, 2003. "Efficiency in Marriage," Review of Economics of the Household, Springer, vol. 1(3), pages 153-167, September.
    10. Maija Halonen, 2002. "Reputation And The Allocation Of Ownership," Economic Journal, Royal Economic Society, vol. 112(481), pages 539-558, July.
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    Cited by:

    1. Richard Evans & Yingyao Hu & Zhong Zhao, 2010. "The fertility effect of catastrophe: U.S. hurricane births," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(1), pages 1-36, January.
    2. Fabre, Alice & Pallage, Stéphane, 2015. "Child labor, idiosyncratic shocks, and social policy," Journal of Macroeconomics, Elsevier, vol. 45(C), pages 394-411.
    3. Bandara, Amarakoon & Dehejia, Rajeev & Rouse, Lavie, 2014. "Impact of income and non-income shocks on child labour: Evidence from a panel survey of Tanzania," WIDER Working Paper Series 118, World Institute for Development Economic Research (UNU-WIDER).
    4. Finlay, Jocelyn E., 2009. "Fertility response to natural disasters : the case of three high mortality earthquakes," Policy Research Working Paper Series 4883, The World Bank.
    5. Angela Cipollone, 2011. "Education as a Precautionary Asset," Working Papers CELEG 1108, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    6. Kalemli-Ozcan, Sebnem, 2002. "Does the Mortality Decline Promote Economic Growth?," Journal of Economic Growth, Springer, vol. 7(4), pages 411-439, December.
    7. Chakrabarty, Sayan & Grote, Ulrike, 2009. "Child Labor in Carpet Weaving: Impact of Social Labeling in India and Nepal," World Development, Elsevier, vol. 37(10), pages 1683-1693, October.

    More about this item


    Fertility · mortality · insurance · uncertainty;

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory


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