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(Why) Do Self-Employed Parents Have More Children?

  • Nzinga Broussard
  • Ralph Chami
  • Gregory Hess

We provide a theory whereby non-benevolent, self-employed households increase their expected family size to raise the likelihood that an inside family member will be a good match at running the business. Hence, having larger family sizes raises the self-employed household’s expected return to their business. Using data from the General Social Survey, we find that respondents have approximately .2 to .4 more actual and expected number of children if they are self-employed as compared to if they are not self-employed. This empirical relationship is established across a broad array of sub-samples using a simple differences in means test. As well, the empirical relationship holds using a regression framework, including the use of instrumental variables estimation to allow for the possibility of endogeneity of the respondent’s self-employment status and whether the respondent’s spouse stays at home.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2003/wp-cesifo-2003-12/cesifo1_wp1103.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1103.

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Date of creation: 2003
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Handle: RePEc:ces:ceswps:_1103
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  1. Ralph Chami & Gregory D. Hess, 2002. "For Better or For Worse? State Level Marital Formation and Risk Sharing," Claremont Colleges Working Papers 2002-07, Claremont Colleges.
  2. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
  3. Leung, Siu Fai, 1991. "A Stochastic Dynamic Analysis of Parental Sex Preferences and Fertility," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1063-88, November.
  4. 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.
  5. Arnott, Richard & Stiglitz, Joseph E, 1991. "Moral Hazard and Nonmarket Institutions: Dysfunctional Crowding Out or Peer Monitoring?," American Economic Review, American Economic Association, vol. 81(1), pages 179-90, March.
  6. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," NBER Working Papers 1942, National Bureau of Economic Research, Inc.
  7. Gregory D. Hess, 2001. "Marriage and Consumption Insurance: What’s Love Got to do With It?," CESifo Working Paper Series 507, CESifo Group Munich.
  8. Robert W. Fairlie & Bruce D. Meyer, 1996. "Ethnic and Racial Self-Employment Differences and Possible Explanations," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 757-793.
  9. Robert W. Fairlie & Bruce D. Meyer, 2000. "Trends in Self-Employment among White and Black Men during the Twentieth Century," Journal of Human Resources, University of Wisconsin Press, vol. 35(4), pages 643-669.
  10. Matthias Benz & Bruno S. Frey, 2008. "Being Independent is a Great Thing: Subjective Evaluations of Self-Employment and Hierarchy," Economica, London School of Economics and Political Science, vol. 75(298), pages 362-383, 05.
  11. Stanley Friedlander & Morris Silver, 1967. "A quantitative study of the determinants of fertility behavior," Demography, Springer, vol. 4(1), pages 30-70, March.
  12. Appelbaum, Elie & Katz, Eliakim, 1991. "The Demand for Children in the Absence of Capital and Risk Markets: A Portfolio Approach," Oxford Economic Papers, Oxford University Press, vol. 43(2), pages 292-304, April.
  13. Blanchflower, David G., 2000. "Self-employment in OECD countries," Labour Economics, Elsevier, vol. 7(5), pages 471-505, September.
  14. David Altig & Steve J. Davis, 1991. "The Timing of Intergenerational Transfers, Tax Policy, and Aggregate Savings," NBER Working Papers 3753, National Bureau of Economic Research, Inc.
  15. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-46, June.
  16. Rosenzweig, Mark R & Schultz, T Paul, 1985. "The Demand for and Supply of Births: Fertility and Its Life Cycle Consequences," American Economic Review, American Economic Association, vol. 75(5), pages 992-1015, December.
  17. Robert J. Barro & Gary S. Becker, . "Fertility Choice in a Model of Economic Growth," University of Chicago - Population Research Center 88-8, Chicago - Population Research Center.
  18. Willis, Robert J, 1973. "A New Approach to the Economic Theory of Fertility Behavior," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages S14-64, Part II, .
  19. Schultz, Theodore W, 1973. "The Value of Children: An Economic Perspective," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages S2-13, Part II, .
  20. Jie Zhang & Junsen Zhang, 1997. "Fertility and Wage Rates in an Overlapping-Generations Model," Canadian Journal of Economics, Canadian Economics Association, vol. 30(1), pages 224-34, February.
  21. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
  22. Chris Robinson & Nigel Tomes, 1982. "Family Labour Supply and Fertility: A Two-Regime Model," Canadian Journal of Economics, Canadian Economics Association, vol. 15(4), pages 706-34, November.
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