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Education and the dynamics of family decisions

  • Echávarri Aguinaga, Rebeca

This paper investigates the extent to which a biased transmission of educational endowments affects fertility. To this end, we devise a version of Becker€ٳ family decision model that takes preference change into account. Specifically, we model education as an instrument that increases the autonomy (to prefer), and autonomy as an instrument of preference-change for household-structures. The empirical validity of the proposed model is examined for the European setting using the European Community Household Panel. In the context of the model, empirical findings imply the following. On the one hand, both preference for quantity and preference for bequest for each offspring (quality) increases with education, while preference for current consumption decreases. On the other hand, education is found to be negatively correlated with fertility, at a decreasing rate. Therefore, the paper provides a useful additional toolkit for public policy evaluation. It explains how public policies oriented toward the guarantee of personal freedoms, such as the expansion of education and autonomy, are likely to guarantee the same freedoms for subsequent generations.

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File URL: http://hdl.handle.net/10810/6577
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Paper provided by University of the Basque Country - Department of Foundations of Economic Analysis II in its series DFAEII Working Papers with number 2009-01.

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Date of creation: Apr 2009
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Handle: RePEc:ehu:dfaeii:200901
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Order Information: Postal: Dpto. de Fundamentos del Análisis Económico II, = Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
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  1. Hanushek, Eric A, 1992. "The Trade-Off between Child Quantity and Quality," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 84-117, February.
  2. William Greene, 2006. "A General Approach to Incorporating Selectivity in a Model," Working Papers 06-10, New York University, Leonard N. Stern School of Business, Department of Economics.
  3. Alfonso Alba & Gema Alvarez & Raquel Carrasco, 2009. "On the estimation of the effect of labour participation on fertility," Spanish Economic Review, Springer, vol. 11(1), pages 1-22, March.
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  11. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
  12. Jean Drèze & Mamta Murthi, 2001. "Fertility, Education, and Development: Evidence from India," Population and Development Review, The Population Council, Inc., vol. 27(1), pages 33-63.
  13. Thomas S. Dee, 2003. "Are There Civic Returns to Education?," NBER Working Papers 9588, National Bureau of Economic Research, Inc.
  14. Becker, Gary S & Lewis, H Gregg, 1973. "On the Interaction between the Quantity and Quality of Children," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages S279-88, Part II, .
  15. Dolores Ferrero Martínez & Amaia Iza, 2004. "Skill premium effects on fertility and female labor force supply," Journal of Population Economics, Springer, vol. 17(1), pages 1-16, February.
  16. Rosenzweig, Mark R & Wolpin, Kenneth I, 1980. "Testing the Quantity-Quality Fertility Model: The Use of Twins as a Natural Experiment," Econometrica, Econometric Society, vol. 48(1), pages 227-40, January.
  17. Terza, Joseph V., 1998. "Estimating count data models with endogenous switching: Sample selection and endogenous treatment effects," Journal of Econometrics, Elsevier, vol. 84(1), pages 129-154, May.
  18. Moav, Omer, 2001. "Cheap Children and the Persistence of Poverty," CEPR Discussion Papers 3059, C.E.P.R. Discussion Papers.
  19. Rachel Connelly & Deborah DeGraff & Deborah Levison & Brian McCall, 2006. "Tackling The Endogeneity Of Fertility In The Study Of Women'S Employment In Developing Countries: Alternative Estimation Strategies Using Data From Urban Brazil," Feminist Economics, Taylor & Francis Journals, vol. 12(4), pages 561-597.
  20. Francisco Covas & J.M.C. Santos Silva, 2000. "A modified hurdle model for completed fertility," Journal of Population Economics, Springer, vol. 13(2), pages 173-188.
  21. Phelps, Charlotte D., 2001. "A clue to the paradox of happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 293-300, July.
  22. Phelps, Charlotte D., 1995. "Wives' motives and fertility," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 49-67, June.
  23. Agee, Mark D & Crocker, Thomas D, 2002. "Parents' Discount Rate and the Intergenerational Transmission of Cognitive Skills," Economica, London School of Economics and Political Science, vol. 69(273), pages 143-54, February.
  24. Sebastiano Bavetta & Vitorocco Peragine, 2006. "Measuring autonomy freedom," Social Choice and Welfare, Springer, vol. 26(1), pages 31-45, January.
  25. Nyhus, Ellen K. & Pons, Empar, 2005. "The effects of personality on earnings," Journal of Economic Psychology, Elsevier, vol. 26(3), pages 363-384, June.
  26. Browning, Martin, 1992. "Children and Household Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1434-75, September.
  27. Frédéric Docquier, 2004. "Income Distribution, Non-convexities and the Fertility-Income Relationship," Economica, London School of Economics and Political Science, vol. 71(281), pages 261-273, 05.
  28. Maria Melkersson & Dan-Olof Rooth, 2000. "Modeling female fertility using inflated count data models," Journal of Population Economics, Springer, vol. 13(2), pages 189-203.
  29. Agee, Mark D. & Crocker, Thomas D., 2000. "Household environmental protection and the intergenerational transmission of human capital," Journal of Economic Psychology, Elsevier, vol. 21(6), pages 673-690, December.
  30. Gintis, Herbert, 1974. "Welfare Criteria with Endogenous Preferences: The Economics of Education," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(2), pages 415-30, June.
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