Cáceres-Delpiano, Julio. 2006. “The Impacts of Family Size on Investment in Child Quality.” Journal of Human Resources 41(4): 738–754.
Using multiple births as an exogenous shift in family size, I investigate the impact of the number of children on child investment and child well-being. Using data from the 1980 US Census Five-Percent Public Use Micro Sample, 2SLS results demonstrate that parents facing a change in family size reallocate resources in a way consistent with Becker’s Quantity & Quality model. A larger family generated by twins in a later birth reduces the likelihood that older children attend private school, reduces the mother’s labor force participation, and increases the likelihood that parents divorce. The impact of family size on a measure of child outcome, such as grade retention, is less clear. The results indicate that for both measures of child investment and child well-being, the 2SLS estimates are statistically distinguishable from OLS estimates, indicating an omitted variables bias in the single equation model.
Julio Cáceres-Delpiano is a professor of economics at the Universidad Carlos III, 28093 Getafe Madrid, SPAIN. The author would like to thank Jonah Gelbach, Seth Sanders, Rodrigo Soares and Jeffrey Smith for their comments and advice. He also wants to thank Roberto Alvarez, Juan Jose Diaz, Eugenio Giolito, Hoda Makar, Alexandra Jabin, Ye Zhang and three anonymous referees for helpful comments and discussions. Finally, he wants to thank the participants at the 17th Annual Congress of the European Society for Population Economics Society (June 13–15, 2003, New York City), participants at the Inter-University Student Conference (IUSC), University of Pennsylvania, Philadelphia (2004), and the participants in the seminars at University of Maryland, Universidad Carlos III, and University of Bern for their comments and advice. The usual disclaimers apply. The data from this article are available from the author from March 2007 through February 2010 at jcaceres@eco.uc3m.es.