Does Family Size Reduce Investment in Children by yurtgc548

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									Does Family Size Reduce
Investment in Children?


          Harry Bane
          ECON 428
           10/07/08
Cyclical Relationships
   Developing countries
       High birth rates + Low life expectancy =
   Developed countries
       Lower fertility rates + higher life expectancy =
   Micro level decision making
       Family vs. Government
Resource Dilution Effect
   As # of Children increases, families with finite
    resources must allocate less investment into each
    child
   Two Assumptions

   Choice rather than an economic given
Empircal Data & Findings
   Two Studies Support Resource Dilution Effect:
       Kinshasa, Congo (Shapiro and Tambashe)
       India (Mari Bhat)
   Two Studies that Counter Resource Dilution Effect:
       Indonesia (Eric Jensen)
       36 country analysis (Allen Kelley)
Problem of Endogeneity
   Quantity-Quality trade-off

   Complexity of Decision
          To have a child or not?
Conclusions
   The negative effects on investment in children with
    increased family size will be strongest if:
       Household income is inflexible
       Resource expenditures in across different activities are
        inflexible.
       The type of investment is considered elastic.
       Substitute-activities to education (self investment) are
        common
       Family size is determined exogenously

								
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