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A comparison and latent variable test of two fertile ideas
Journal of Population Economics
|January 1, 1990
Summary
This study differentiates between the Becker and Easterlin economic models of fertility. Findings support the Easterlin model over the Becker model, indicating taste, not endowments, influences fertility decisions.
Area of Science:
- Economics
- Demography
- Sociology
Background:
- The economics of fertility involves models explaining childbearing decisions.
- Unobserved variables can bias estimations in fertility models.
- Key models include the Becker (endowment) and Easterlin (taste) frameworks.
Purpose of the Study:
- To empirically distinguish between the Becker and Easterlin models of fertility economics.
- To test for biases arising from unobserved variables in fertility determinants.
- To assess the role of endowments versus tastes in shaping fertility choices.
Main Methods:
- Development of a test to differentiate between the Becker and Easterlin models.
- Utilizing a latent variable system with data on individuals, siblings, and cousins.
- Estimation of a model incorporating sibling and cousin correlations to control for unobserved heterogeneity.
Main Results:
- The developed model successfully identifies distinct elements of the Becker and Easterlin formulations.
- Empirical estimates align with the Easterlin model's predictions.
- Neither model yielded statistically significant income coefficient estimates, suggesting income's direct impact on fertility is limited in this context.
Conclusions:
- The Easterlin model, emphasizing tastes, provides a better explanation for fertility economics than the Becker model, which focuses on endowments.
- Unobserved family factors significantly influence fertility decisions.
- Income's direct effect on fertility appears negligible according to these models and data.
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