The Quantity and Quality of Children: A Semi-Parametric Bayesian IV Approach

34 Pages Posted: 15 Mar 2014

See all articles by Sylvia Fruhwirth-Schnatter

Sylvia Fruhwirth-Schnatter

Johannes Kepler University - Department of Applied Statistics and Econometrics

Martin Halla

Johannes Kepler University Linz - Department of Economics; IZA Institute of Labor Economics

Alexandra Posekany

Vienna University of Economics and Business

Gerald J. Pruckner

University Linz - Department of Economics

Thomas Schober

Johannes Kepler University Linz

Abstract

Prior empirical research on the theoretically proposed interaction between the quantity and the quality of children builds on exogenous variation in family size due to twin births and focuses on human capital outcomes. The typical finding can be described as a statistically nonsignificant two-stage least squares (2SLS) estimate, with substantial standard errors. We regard these conclusions of no empirical support for the quantity-quality trade-off as premature and, therefore, extend the empirical approach in two ways. First, we add health as an additional outcome dimension. Second, we apply a semi-parametric Bayesian IV approach for econometric inference. Our estimation results substantiate the finding of a zero effect: we provide estimates with an increased precision by a factor of approximately twenty-three, for a broader set of outcomes.

Keywords: quantity-quality model of fertility, family size, human capital, health, semi-parametric Bayesian IV approach

JEL Classification: J13, C26, C11, I20, J20, I10

Suggested Citation

Fruhwirth-Schnatter, Sylvia and Halla, Martin and Posekany, Alexandra and Pruckner, Gerald J. and Schober, Thomas, The Quantity and Quality of Children: A Semi-Parametric Bayesian IV Approach. IZA Discussion Paper No. 8024. Available at SSRN: https://ssrn.com/abstract=2409546

Sylvia Fruhwirth-Schnatter (Contact Author)

Johannes Kepler University - Department of Applied Statistics and Econometrics ( email )

Altenbergerstrasse 69
Linz
Austria

Martin Halla

Johannes Kepler University Linz - Department of Economics ( email )

Altenbergerstrasse 69
A-4040 Linz, 4040
Austria

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Alexandra Posekany

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

Gerald J. Pruckner

University Linz - Department of Economics ( email )

Altenbergerstr. 69
A-4040 Linz, Uper Austria 4040
Austria

Thomas Schober

Johannes Kepler University Linz

Altenbergerstr. 69
A-4040 Linz, Uper Austria 4040
Austria

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