The Value of Life across Generations: Fertility and Parental Investment

We study how fertility and parental investment shape the value of mortality improvements in a quantitative dynastic life-cycle model. Households choose fertility, saving, education spending, and inter-vivos transfers under earnings risk and borrowing constraints. We distinguish the own-life component of survival valuation from the dynastic value of a statistical life, which also incorporates the value parents assign to survival benefits received by their descendants. Calibrating the model to the prebaby-boom United States, we find that the dynastic premium accounts for a substantial share of young households' valuation of a common survival improvement. Most of this premium arises from dynastic continuation, while education and financial transfers increase it further. Historical declines in maternal mortality and improvements in old-age survival both raise fertility. Lower maternal mortality reduces average investment per child, whereas improved old-age survival leaves it nearly unchanged. Investment rises in both cases among households whose fertility remains unchanged. The dynastic premium responds more strongly to improved old-age survival, while endogenous fertility materially changes both total dynastic valuation and its division between own-life and dynastic components. These findings connect the valuation of mortality improvements to the quantity-quality trade-off and show why the scope of a mortality change across generations matters for willingness to pay.