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Are children 'normal'?

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Listed:
  • Dan A. Black
  • Natalia A. Kolesnikova
  • Seth G. Sanders
  • Lowell J. Taylor

Abstract

In his classic work on the economics of fertility, Becker (1960) suggests that children are likely “normal.” We examine this contention. Our first step is documenting an empirical regularity about the cross section of white married couples in the U.S.: when we restrict comparisons to households living in broadly similar locations (e.g., in expensive urban areas, or in rural areas), completed fertility is positively correlated with the husband’s income. Two alternative models rationalize the data—one in which children are “normal” and a second in which the observed pattern emerges solely as a consequence of rational sorting by households. In an effort to sort out causal effects, we undertake a rather specialized empirical exercise to analyze the localized impact on fertility of the mid-1970s increase in world energy prices—an exogenous shock that substantially increased men’s incomes in the Appalachian coal-mining region. We find that children are indeed “normal.”

Suggested Citation

  • Dan A. Black & Natalia A. Kolesnikova & Seth G. Sanders & Lowell J. Taylor, 2009. "Are children 'normal'?," Working Papers 2008-040, Federal Reserve Bank of St. Louis.
  • Handle: RePEc:fip:fedlwp:2008-040
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    References listed on IDEAS

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    1. Larry E. Jones & Michele Tertilt, 2006. "An Economic History of Fertility in the U.S.: 1826-1960," NBER Working Papers 12796, National Bureau of Economic Research, Inc.
    2. Mary Borg, 1989. "The Income-Fertility Relationship: Effect of the Net Price of a Child," Demography, Springer;Population Association of America (PAA), vol. 26(2), pages 301-310, May.
    3. Dan Black & Terra McKinnish & Seth Sanders, 2005. "The Economic Impact Of The Coal Boom And Bust," Economic Journal, Royal Economic Society, vol. 115(503), pages 449-476, April.
    4. 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 279-288, Part II, .
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    6. Hotz, V Joseph & Miller, Robert A, 1988. "An Empirical Analysis of Life Cycle Fertility and Female Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 91-118, January.
    7. Dan Black & Kermit Daniel & Seth Sanders, 2002. "The Impact of Economic Conditions on Participation in Disability Programs: Evidence from the Coal Boom and Bust," American Economic Review, American Economic Association, vol. 92(1), pages 27-50, March.
    8. 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 14-64, Part II, .
    9. Schultz, T Paul, 1985. "Changing World Prices, Women's Wages, and the Fertility Transition: Sweden, 1860-1910," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1126-1154, December.
    10. Black, Dan & Gates, Gary & Sanders, Seth & Taylor, Lowell, 2002. "Why Do Gay Men Live in San Francisco?," Journal of Urban Economics, Elsevier, vol. 51(1), pages 54-76, January.
    11. Heckman, James J & Walker, James R, 1990. "The Relationship between Wages and Income and the Timing and Spacing of Births: Evidence from Swedish Longitudinal Data," Econometrica, Econometric Society, vol. 58(6), pages 1411-1441, November.
    12. Angrist, Joshua D & Evans, William N, 1998. "Children and Their Parents' Labor Supply: Evidence from Exogenous Variation in Family Size," American Economic Review, American Economic Association, vol. 88(3), pages 450-477, June.
    13. Simon, Curtis J. & Tamura, Robert, 2009. "Do higher rents discourage fertility? Evidence from U.S. cities, 1940-2000," Regional Science and Urban Economics, Elsevier, vol. 39(1), pages 33-42, January.
    14. Rafael Lalive & Josef Zweim�ller, "undated". "Does Parental Leave Affect Fertility and Return-to-Work? Evidence from a �True Natural Experiment�," IEW - Working Papers 242, Institute for Empirical Research in Economics - University of Zurich.
    15. Black, Dan & Sanders, Seth & Taylor, Lowell, 2003. "Measurement of Higher Education in the Census and Current Population Survey," Journal of the American Statistical Association, American Statistical Association, vol. 98, pages 545-554, January.
    16. Rafael Lalive & Josef Zweimüller, 2009. "How Does Parental Leave Affect Fertility and Return to Work? Evidence from Two Natural Experiments," The Quarterly Journal of Economics, Oxford University Press, vol. 124(3), pages 1363-1402.
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    Cited by:

    1. Markus Brueckner & Hannes Schwandt, 2015. "Income and Population Growth," Economic Journal, Royal Economic Society, vol. 125(589), pages 1653-1676, December.
    2. Dettling, Lisa J. & Kearney, Melissa S., 2014. "House prices and birth rates: The impact of the real estate market on the decision to have a baby," Journal of Public Economics, Elsevier, vol. 110(C), pages 82-100.
    3. Michael F. Lovenheim & Kevin J. Mumford, 2010. "Do Family Wealth Shocks Affect Fertility Choices? Evidence from the Housing Market Boom and Bust," Purdue University Economics Working Papers 1228, Purdue University, Department of Economics.
    4. David Canning & Declan French & Michael Moore, 2016. "The Economics of Fertility Timing: An Euler Equation Approach," CHaRMS Working Papers 16-03, Centre for HeAlth Research at the Management School (CHaRMS).
    5. Day, Creina & Guest, Ross, 2016. "Fertility and female wages: A new link via house prices," Economic Modelling, Elsevier, vol. 53(C), pages 121-132.
    6. Ager, Philipp & Brueckner, Markus & Herz, Benedikt, 2017. "Structural Change and the Fertility Transition in the American South," Discussion Papers of Business and Economics 6/2017, University of Southern Denmark, Department of Business and Economics.
    7. Liepmann, Hannah, 2018. "The Impact of a Negative Labor Demand Shock On Fertility - Evidence From the Fall of the Berlin Wall," Rationality and Competition Discussion Paper Series 69, CRC TRR 190 Rationality and Competition.
    8. repec:dem:demres:v:36:y:2017:i:51 is not listed on IDEAS
    9. Tia Palermo & Sudhanshu Handa & Amber Peterman & Leah Prencipe & David Seidenfeld, 2016. "Unconditional government social cash transfer in Africa does not increase fertility," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(4), pages 1083-1111, October.
    10. Johanna Catherine Maclean & Reginald Covington & Asia Sikora Kessler, 2016. "Labor Market Conditions At School-Leaving: Long-Run Effects On Marriage And Fertility," Contemporary Economic Policy, Western Economic Association International, vol. 34(1), pages 63-88, January.
    11. Vellore Arthi & Brian Beach & W. Walker Hanlon, 2017. "Estimating the Recession-Mortality Relationship when Migration Matters," NBER Working Papers 23507, National Bureau of Economic Research, Inc.
    12. Kristiina Huttunen & Jenni Kellokumpu, 2016. "The Effect of Job Displacement on Couples' Fertility Decisions," Journal of Labor Economics, University of Chicago Press, vol. 34(2), pages 403-442.
    13. Hannah Liepmann, 2016. "The Impact of a Negative Labor Demand Shock on Fertility - Evidence from the Fall of the Berlin Wall," SFB 649 Discussion Papers SFB649DP2016-042, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    14. Janet Currie & Hannes Schwandt, 2015. "Short and Long-Term Effects of Unemployment on Fertility," CEP Discussion Papers dp1387, Centre for Economic Performance, LSE.
    15. Creina Day & Ross S. Guest, 2014. "The Effect of Gender Wages and Working Age Populations on Fertility and House Prices," Crawford School Research Papers 1401, Crawford School of Public Policy, The Australian National University.
    16. Hofmann, Barbara & Hohmeyer, Katrin, 2016. "The effect of the business cycle at college graduation on fertility," Economics of Education Review, Elsevier, vol. 55(C), pages 88-102.
    17. Thomas A. Garrett & Natalia A. Kolesnikova, 2010. "Local price variation and the tax incidence of state lotteries," Working Papers 2010-035, Federal Reserve Bank of St. Louis.
    18. Anca Cotet & Kevin K. Tsui, 2010. "Resource Curse or Malthusian Trap? Evidence from Oil Discoveries and Extractions," Working Papers 201001, Ball State University, Department of Economics, revised Mar 2010.
    19. Black, Dan A. & Kolesnikova, Natalia & Taylor, Lowell J., 2014. "Why do so few women work in New York (and so many in Minneapolis)? Labor supply of married women across US cities," Journal of Urban Economics, Elsevier, vol. 79(C), pages 59-71.

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    Keywords

    Demography;

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General

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