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The Twin Instrument: Fertility and Human Capital Investment

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  • Bhalotra, Sonia R.

    () (University of Essex)

  • Clarke, Damian

    () (Universidad de Santiago de Chile)

Abstract

Twin births are often used to instrument fertility to address (negative) selection of women into fertility. However recent work shows positive selection of women into twin birth. Thus, while OLS estimates will tend to be downward biased, twin-IV estimates will tend to be upward biased. This is pertinent given the emerging consensus that fertility has limited impacts on women's labour supply, or on investments in children. Using data for developing countries and the United States, we demonstrate the nature and size of the bias in the twin-IV estimator of the quantity-quality trade-off and estimate bounds on the true parameter.

Suggested Citation

  • Bhalotra, Sonia R. & Clarke, Damian, 2018. "The Twin Instrument: Fertility and Human Capital Investment," IZA Discussion Papers 11878, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11878
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    References listed on IDEAS

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    1. Douglas Almond & Bhashkar Mazumder, 2013. "Fetal Origins and Parental Responses," Annual Review of Economics, Annual Reviews, vol. 5(1), pages 37-56, May.
    2. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2005. "The More the Merrier? The Effect of Family Size and Birth Order on Children's Education," The Quarterly Journal of Economics, Oxford University Press, vol. 120(2), pages 669-700.
    3. Mark R. Rosenzweig & Junsen Zhang, 2009. "Do Population Control Policies Induce More Human Capital Investment? Twins, Birth Weight and China's "One-Child" Policy," Review of Economic Studies, Oxford University Press, vol. 76(3), pages 1149-1174.
    4. Hongbin Li & Junsen Zhang & Yi Zhu, 2008. "The quantity-Quality trade-Off of children In a developing country: Identification using chinese twins," Demography, Springer;Population Association of America (PAA), vol. 45(1), pages 223-243, February.
    5. Toru Kitagawa, 2015. "A Test for Instrument Validity," Econometrica, Econometric Society, vol. 83(5), pages 2043-2063, September.
    6. Emla Fitzsimons & Bansi Malde, 2014. "Empirically probing the quantity–quality model," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(1), pages 33-68, January.
    7. Vladimir Ponczek & Andre Portela Souza, 2012. "New Evidence of the Causal Effect of Family Size on Child Quality in a Developing Country," Journal of Human Resources, University of Wisconsin Press, vol. 47(1), pages 64-106.
    8. Julio Cáceres-Delpiano, 2006. "The Impacts of Family Size on Investment in Child Quality," Journal of Human Resources, University of Wisconsin Press, vol. 41(4).
    9. Joshua Angrist & Victor Lavy & Analia Schlosser, 2010. "Multiple Experiments for the Causal Link between the Quantity and Quality of Children," Journal of Labor Economics, University of Chicago Press, vol. 28(4), pages 773-824, October.
    10. Richard Akresh & Sonia Bhalotra & Marinella Leone & Una Okonkwo Osili, 2012. "War and Stature: Growing Up during the Nigerian Civil War," American Economic Review, American Economic Association, vol. 102(3), pages 273-277, May.
    11. Bhalotra, Sonia R. & Karlsson, Martin & Nilsson, Therese, 2015. "Infant Health and Longevity: Evidence from a Historical Trial in Sweden," IZA Discussion Papers 8969, Institute for the Study of Labor (IZA).
    12. Douglas Almond & Hilary W. Hoynes & Diane Whitmore Schanzenbach, 2011. "Inside the War on Poverty: The Impact of Food Stamps on Birth Outcomes," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 387-403, May.
    13. Seema Jayachandran & Adriana Lleras-Muney & Kimberly V. Smith, 2010. "Modern Medicine and the Twentieth Century Decline in Mortality: Evidence on the Impact of Sulfa Drugs," American Economic Journal: Applied Economics, American Economic Association, vol. 2(2), pages 118-146, April.
    14. repec:ucp:jpolec:doi:10.1086/692712 is not listed on IDEAS
    15. Aaronson, Daniel & Dehejia, Rajeev & Jordon, Andrew & Pop-Eleches, Cristian & Samii, Cyrus & Schultze, Karl, 2017. "The Effect of Fertility on Mothers’ Labor Supply over the Last Two Centuries," MPRA Paper 76768, University Library of Munich, Germany.
    16. Damian Clarke, 2014. "PLAUSEXOG: Stata module to implement Conley et al's plausibly exogenous bounds," Statistical Software Components S457832, Boston College Department of Economics, revised 29 Sep 2017.
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    More about this item

    Keywords

    twins; fertility; maternal health; quantity-quality trade-off; parental investment; bounds; IV;

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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