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Increasing the credibility of the twin birth instrument

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  • Helmut Farbmacher
  • Raphael Guber
  • Johan Vikström

Abstract

Twin births are an important instrument for the endogenous fertility decision. However, twin births are not exogenous either as dizygotic twinning is correlated with maternal characteristics. Following the medical literature, we assume that monozygotic twins are exogenous, and construct a new instrument, which corrects for the selection although monozygotic twinning is usually unobserved in survey and administrative datasets. Using administrative data from Sweden, we show that the usual twin instrument is related to observed and unobserved determinants of economic outcomes, while our new instrument is not. In our applications we find that the classical twin instrument underestimates the negative effect of fertility on labor income. This finding is in line with the observation that high earners are more likely to delay childbearing and hence have a higher risk to get dizygotic twins.

Suggested Citation

  • Helmut Farbmacher & Raphael Guber & Johan Vikström, 2018. "Increasing the credibility of the twin birth instrument," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 33(3), pages 457-472, April.
    • Handle: RePEc:wly:japmet:v:33:y:2018:i:3:p:457-472
    DOI: 10.1002/jae.2616
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    Cited by:

    1. Tabea Bucher-Koenen & Helmut Farbmacher & Raphael Guber & Johan Vikström, 2020. "Double Trouble: The Burden of Child-rearing and Working on Maternal Mortality," Demography, Springer;Population Association of America (PAA), vol. 57(2), pages 559-576, April.
    2. Boyan Zheng & Qiongshi Lu & Jason Fletcher, 2023. "Estimating Causal Effects of Fertility on Life Course Outcomes: Evidence Using A Dyadic Genetic Instrumental Variable Approach," NBER Working Papers 30955, National Bureau of Economic Research, Inc.
    3. Manuel Denzer, 2019. "Estimating Causal Effects in Binary Response Models with Binary Endogenous Explanatory Variables - A Comparison of Possible Estimators," Working Papers 1916, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    4. Mark E. McGovern, 2019. "How much does birth weight matter for child health in developing countries? Estimates from siblings and twins," Health Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 3-22, January.
    5. Beatrice Baaba Tawiah, 2023. "The Effect of Children on Health," Working Papers Dissertations 103, Paderborn University, Faculty of Business Administration and Economics.
    6. Semih Tumen & Belgi Turan, 2023. "The effect of fertility on female labor supply in a labor market with extensive informality," Empirical Economics, Springer, vol. 65(4), pages 1855-1894, October.
    7. Erika Raquel Badillo & Lina Cardona-Sosa & Carlos Medina & Leonardo Fabio Morales & Christian Posso, 2019. "Twin instrument, fertility and women’s labor force participation: evidence from Colombian low-income families," Borradores de Economia 1071, Banco de la Republica de Colombia.
    8. Joseph Boniface Ajefu, 2019. "Does having children affect women’s entrepreneurship decision? Evidence from Nigeria," Review of Economics of the Household, Springer, vol. 17(3), pages 843-860, September.
    9. Cepaluni, Gabriel & Chewning, Taylor Kinsley & Driscoll, Amanda & Faganello, Marco Antonio, 2022. "Conditional cash transfers and child labor," World Development, Elsevier, vol. 152(C).

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    More about this item

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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