From: aarethan@cicero.spc.uchicago.edu (Ethan Ligon)
Subject: Re: Questions about the Economics of the Family
Organization: U of Chicago, SSPPCC
Date: Fri, 13 Nov 1992 18:36:20 GMT

In article <BxM5sv.KEJ@usenet.ucs.indiana.edu> stcmille@silver.ucs.indiana.edu (Stephen C. Miller) writes:
>In article <3852@key.COM> rburns@key.COM (Randy Burns) writes:
>>One of the results of modern economic inquiry has been the evidence
>>that family size tends to decrease as family income increases(at least
>>up to some income point which is fairly high).
>>
A more accurate characterization of the results of "modern economic
enquiry", at least if one considers international evidence, would 
probably be that family size tends to *increase* with income, up 
to a certain level, at which point it tends to decrease.  See, e.g.
Becker-Murphy-Tamura (1990), Lazear-Michael (1989?).  

>(eg: children become objects of consumption and not investment)
It's not clear to me how this is implied by a statement about 
income elasticities!
>>
>>Something that has troubled me a bit about this analysis: the studies I
>>seen do not take into account the growing tendency for wealthier men in 
>>America to get married multiple times. My current sense is that wealth
>>tends to have a positive effect on men's fertility and a negative effect
>>on women's fertility. 
I hadn't heard the assertion that there's "a growing tendency for wealthier
men...to get married multiple times", so I ran a regression using the
General Social Survey.  Here's the regression:

  Prob(divorce)=beta1*realrinc + beta2*year + u

Data cover the years 1972 through 1988, with a total sample size of 6578.

The (probit) results for both men and women:

       Point est.  StdErr     t
       ==========  ========  =======
beta1  -8.92e-7    2.00e-06  -0.446
beta2   0.01700    0.0040     4.296 

with men only in the sample:

       Point est.  StdErr     t
       ==========  ========  =======
beta1  -8.06e-6    3.05e-06  -2.640
beta2   0.01360    0.0057     2.376

So, according to this (pretty good) evidence, the probability of divorce *is* 
increasing over time, but wealthier men are (significantly!) less likely
to have a divorce than are less wealthy men. 

Now, does wealth have a positive effect on male fertility?

Here's the regression:

  numkids = beta1*realrinc + beta2*year + u

In this regression, with males only, *neither* realrinc nor year was
significant, although realrinc (with a p-value of 0.110 and a
coefficient of -0.000015) might be said to be marginally significant,
though of the opposite sign of that predicted by the original poster.

Running the same regression with women only, year is still totally
insignificant, but realrinc is significant and negative, with a
p-value of -2.466.

>Nice idea.
But seemingly contradicted by the available evidence.
>>
>>Does anyone have any references to some good studies that they could share
>>on this area?
>>
>I know that it is often remarked that men generally have a higher
>desired fertility than women - chekc the World Fertility Survey data or
>DHS survey data for confirmation of this.

This isn't supported by the GSS either.  Note that GSS samples only American
adults, however, which is quite different (!) from an international sample.

Mean number given in response to the question:

"What do you think is the ideal number of children for a family to have?"

Men    2.593

Women  2.636

Given the standard deviations of these means, I'd say that the
difference isn't significant.

The n for these  frequencies is 17,895.

>
>Perhaps Becker has addressed this question?  In general it is a question
>that sociologists or even economists would tend to address before
>anthropologists.

Becker certainly has!  The stylized fact that he usually cites, however,
is that at *lower* levels of income, the income elasticity of children
is apparently positive, and switches levels as income increases.  This
fact accords well with any of the international fertility literature that
I've seen.  See, e.g., Becker-Tomes (1986), or Becker-Murphy-Tamura (1990),
or Barro-Becker (1988).  The thrust of the theory in these papers (*very*
roughly) is that there exists a human capital investment technology with 
increasing returns to scale, but a fixed cost up front. An alternative
technology is reproduction, with constant returns to scale.  This results
in "quantity" investments in children at low income levels, and
"quality" investments (e.g. investment in schooling of children) at
higher income levels.
-- 
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Ethan Ligon                                  ethan@cicero.spc.uchicago.edu 
Economics Research Center                    (312) 753-7521
University of Chicago                        TANSTAAFL; but damn I'm hungry!