A Portfolio Approach to Mortality Shocks and Fertility Choice: Theory and Evidence from Africa

CentER Discussion Paper Series 2013-051

44 Pages Posted: 18 Sep 2013

See all articles by Ruixin Wang

Ruixin Wang

Tilburg University - Center for Economic Research (CentER)

Yang Zhou

Tilburg University - Center and Faculty of Economics and Business Administration

Erwin H. Bulte

Tilburg University - Department of Economics; Wageningen University

Date Written: September 16, 2013

Abstract

The effects of the HIV/AIDS epidemic on fertility in Africa remains ill understood. To align the contrasting findings of recent empirical research, we develop a portfolio model that captures the potential trade-off between "quantity" and "quality" of offspring. According to this theoretical model, the overall impact of mortality shocks on fertility is heterogeneous, and involves changes in human capital investment strategies. A key prediction is that investment switching and fertility impacts are conditional on income levels. We use African panel data to test the implications of the model, and find strong support for key model predictions. In particular, the impact of HIV prevalence on both fertility and human capital investments varies with income in a manner that is consistent with model predictions.

Keywords: HIV/AIDS, Fertility, Portfolio, Development

JEL Classification: D8, I12, J13

Suggested Citation

Wang, Ruixin and Zhou, Yang and Bulte, Erwin H., A Portfolio Approach to Mortality Shocks and Fertility Choice: Theory and Evidence from Africa (September 16, 2013). CentER Discussion Paper Series 2013-051. Available at SSRN: https://ssrn.com/abstract=2326381 or http://dx.doi.org/10.2139/ssrn.2326381

Ruixin Wang (Contact Author)

Tilburg University - Center for Economic Research (CentER) ( email )

Yang Zhou

Tilburg University - Center and Faculty of Economics and Business Administration ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Erwin H. Bulte

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 9111 (Phone)

Wageningen University

Hollandseweg 1
6706 KN
Wageningen
Netherlands

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