Multiple experiments for the causal link between the quantity and quality of children

A longstanding question in the economics of the family is the relationship between sibship size and subsequent human capital formation and welfare. If there is a causal "quantity-quality trade-off," then policies that discourage large families should lead to increased human capital, higher earnings, and, at the macro level, promote economic development. Ordinary least squares regression estimates and a large theoretical literature suggests that this is indeed the case. This paper presents new evidence on the child-quantity/child-quality trade-off using quasi-experimental variation due to twin births and preferences for a mixed sibling-sex composition, as well as ethnic differences in the effects of these variables and preferences for male births in some ethnic groups. For the purposes of this analysis, we constructed a unique matched data set linking Israeli Census data on human capital, earnings, and other outcomes with information on the structure of families drawn from a population registry. Our sample includes groups with very high fertility. An innovation in our econometric approach is the juxtaposition of results from multiple instrumental variables (IV) strategies, capturing the effects of fertility over different ranges for different sorts of people. (cont.) To increase precision, we also develop an estimator that combines different instrument sets across partially-overlapping parity-specific sub-samples. The resulting variety of evidence addresses the question of the external validity of a given set of IV estimates. Our results are remarkably consistent in showing no evidence of a quantity-quality trade-off across samples and experiments. We do find, however, that girls from larger families marry sooner. Keywords: fertility, instrumental variables, external validity, quantity-quality trade-offs. JEL Classifications: C31, J13, J31.