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When having many children pays: a case study from Taiwan

  • Mun Lai


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    The objective of this paper is to investigate the direct financial cost and benefit of raising children during a demographic transition in Taiwan, and to examine whether fertility decline is consistent with Caldwell’s wealth flow theory, which states that fertility decline is caused by reduced benefits of children. The paper describes a method of estimating the average economic returns of children over the entire parental lifecycle, using a 42-year span of Taiwanese household and individual economic pseudo-panel data. Results show that returns to children may turn positive and are not highly negative all the time, as found in the previous literature. Copyright Springer-Verlag 2012

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    Article provided by Springer in its journal Journal of Population Economics.

    Volume (Year): 25 (2012)
    Issue (Month): 1 (January)
    Pages: 323-348

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    Handle: RePEc:spr:jopoec:v:25:y:2012:i:1:p:323-348
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    1. Parish, W.L. & Willis, R.J., 1992. "Daughters, Education, and Family Budgets: Taiwan Experiences," University of Chicago - Economics Research Center 92-8, Chicago - Economics Research Center.
    2. Andrew Mason & Ronald Lee & An-Chi Tung & Mun-Sim Lai & Tim Miller, 2009. "Population Aging and Intergenerational Transfers: Introducing Age into National Accounts," NBER Chapters, in: Developments in the Economics of Aging, pages 89-122 National Bureau of Economic Research, Inc.
    3. Cigno, Alessandro, 1992. "Children and Pensions," Journal of Population Economics, Springer, vol. 5(3), pages 175-83, August.
    4. Luis Angeles, 2010. "Demographic transitions: analyzing the effects of mortality on fertility," Journal of Population Economics, Springer, vol. 23(1), pages 99-120, January.
    5. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1986. "The Strategic Bequest Motive," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages S151-82, July.
    6. Prema-Chandra Athukorala & Pang-Long Tsai, 2003. "Determinants of Household Saving in Taiwan: Growth, Demography and Public Policy," Journal of Development Studies, Taylor & Francis Journals, vol. 39(5), pages 65-88.
    7. Shin-Yi Chou & Jin-Tan Liu & Michael Grossman & Theodore J. Joyce, 2007. "Parental Education and Child Health: Evidence from a Natural Experiment in Taiwan," NBER Working Papers 13466, National Bureau of Economic Research, Inc.
    8. Ermisch, John, 1989. "Intergenerational Transfers in Industrialised Countries: Effects of Age Distribution and Economic Institutions," Journal of Population Economics, Springer, vol. 1(4), pages 269-84.
    9. Cain, Glen G, 1971. "Issues in the Economics of a Population Policy for the United States," American Economic Review, American Economic Association, vol. 61(2), pages 408-17, May.
    10. Schultz, T Paul, 1969. "An Economic Model of Family Planning and Fertility," Journal of Political Economy, University of Chicago Press, vol. 77(2), pages 153-80, March/Apr.
    11. Jensen, Eric R, 1990. "An Econometric Analysis of the Old-Age Security Motive for Childbearing," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(4), pages 953-68, November.
    12. Zhang, Junsen, 1990. "Mortality and Fertility: How Large Is the Direct Child Replacement Effect in China?," Journal of Population Economics, Springer, vol. 3(4), pages 303-14, December.
    13. Iyer, Sriya & Velu, Chander, 2006. "Real options and demographic decisions," Journal of Development Economics, Elsevier, vol. 80(1), pages 39-58, June.
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