7 Pages Posted: 26 Jan 2010
This article tests the connection between credit constraints and negative family size effects on child earnings using bequest receipt to signal access to credit markets. The dominant economic model of fertility predicts a negative relationship between family size and child achievement. In the model, limits on borrowing create this “quality-quantity trade-off.” This article tests for the relevance of credit constraints using Panel Study of Income Dynamics data to compare family size effects across groups defined by bequest receipt. Contrary to the credit constraints explanation, those receiving large bequests exhibit large family size effects, while those not receiving bequests show little to no effect.
JEL Classification: J13, D1, I2
Suggested Citation: Suggested Citation
Grawe, Nathan D., Bequest Receipt and Family Size Effects. Economic Inquiry, Vol. 48, Issue 1, pp. 156-162, January 2010. Available at SSRN: https://ssrn.com/abstract=1542281 or http://dx.doi.org/10.1111/j.1465-7295.2008.00208.x
By David Evans
By Simon Parker
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