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Title: Are Children Normal?

Citation Type: Working Paper

Publication Year: 2009

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Abstract: In his classic work on the economics of fertility, Becker (1960) suggests that children are likely normal. We examine this contention. Our first step is documenting an empirical regularity about the cross section of white married couples in the U.S.: when we restrict comparisons to households living in broadly similar locations (e.g., in expensive urban areas, or in rural areas), completed fertility is positively correlated with the husbands income. Two alternative models rationalize the dataone in which children are normal and a second in which the observed pattern emerges solely as a consequence of rational sorting by households. In an effort to sort out causal effects, we undertake a rather specialized empirical exercise to analyze the localized impact on fertility of the mid-1970s increase in world energy pricesan exogenous shock that substantially increased men's incomes in the Appalachian coal-mining region. We find that children are indeed normal.

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Authors: Taylor, Lowell J.; Kolesnikova, Natalia; Sanders, Seth G.; Black, Dan

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Publication Number: 2008-040D

Institution: Federal Reserve Bank of St. Louis

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Data Collections: IPUMS USA

Topics: Aging and Retirement, Education, Family and Marriage, Fertility and Mortality, Housing and Segregation, Labor Force and Occupational Structure

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