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Is the Quantity-Quality Trade-off Really a Trade-off for All?

Author

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  • Millimet, Daniel

    (SMU)

  • Wang, Le

    (SMU)

Abstract
Although the theoretical trade-off between the quantity and quality of children is well-established, empirical evidence supporting such a causal relationship is limited. Moreover, empirical studies that have been undertaken typically focus on education as a measure of child quality and have been predominantly limited to linear regression analysis, thereby focusing on the impact of the quantity of children on the (conditional) mean. In contrast, this paper uses two measures of child health as well as recently developed nonparametric tests for stochastic dominance to assess whether the quantity-quality trade-off holds across the entire distribution, or whether the benefits of smaller families are only experienced by some. Using data from the Indonesia Family Life Survey and controlling for the potential endogeneity of fertility, we find evidence that the trade-off exists over the majority of the distribution. However, robust rankings of distributions by sibship size are only possible if one accounts for ‘dispersion’ in child health. Moreover, the magnitude of the trade-off is not always uniform; individuals in the lower tail of the distribution may face a greater trade-off.

Suggested Citation

  • Millimet, Daniel & Wang, Le, 2005. "Is the Quantity-Quality Trade-off Really a Trade-off for All?," Departmental Working Papers 0502, Southern Methodist University, Department of Economics.
    • Handle: RePEc:smu:ecowpa:0502
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    More about this item

    Keywords

    Intrahousehold Allocation; Health; Human Capital; Fertility; Stochastic Dominance;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D10 - Microeconomics - - Household Behavior - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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