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Related Experiment Videos

Are Children "Normal"?

Dan A Black1, Natalia Kolesnikova2, Seth G Sanders3

  • 1University of Chicago, NORC and IZA.

The Review of Economics and Statistics
|July 24, 2015
PubMed
Summary
This summary is machine-generated.

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Children are a normal good, meaning higher income leads to increased demand. This study confirms that as husbands' income rises, completed fertility also increases, supporting economic theories.

Area of Science:

  • Economics
  • Sociology
  • Demography

Background:

  • Becker's (1960) "theory of the allocation of time" posits children are a normal good.
  • Empirical evidence on the income elasticity of fertility remains debated.
  • Previous studies have faced challenges in isolating the causal effect of income on fertility.

Purpose of the Study:

  • To empirically test Becker's hypothesis that children are a normal economic good.
  • To investigate the relationship between husband's income and completed fertility.
  • To establish a causal link between income changes and fertility rates.

Main Methods:

  • Cross-sectional analysis of non-Hispanic white married couples in the U.S.
  • Controlling for education and location to isolate income effects.
Keywords:
Appalachian fertilityeconomics of fertilitylocation choice

Related Experiment Videos

  • Difference-in-differences approach using an exogenous shock (1970s energy crisis).

    • Main Results:

    • Completed fertility is positively correlated with husband's income among similarly-educated women in similar locations.
    • An exogenous increase in men's income in the Appalachian coal-mining region led to a significant increase in fertility.
    • The findings are consistent with the economic concept of children as a normal good.

    Conclusions:

    • Empirical evidence supports the hypothesis that children are a normal good.
    • Income increases, particularly exogenous ones, positively impact fertility decisions.
    • This study provides robust evidence for the income elasticity of fertility.