Measuring the Value of Children by Birth Order and Infant Health

Frank Heiland ()

No 267, Computing in Economics and Finance 2001 from Society for Computational Economics

Abstract: One of the important determinants of fertility behavior is the value (cost and benefits) of children as perceived by parents. This value is likely to vary by child and parental characteristics, household income, and other aspects of the socioeconomic environment. Since it is non-economic as well as economic in nature, the true value can only be obtained after a proper aggregation of these two different types of values. This paper estimates the value of children by infant health and birth order using a dynamic programming model. The underlying hypothesis is that the observed fertility outcome of parents is the solution to their life-cycle optimization problem. Findings from the National Longitudinal Survey of Youth (1979 Cohort) indicate that the perceived net benefits from a child are larger the earlier it is in the birth order. Better-educated mothers have a higher benefit from children early in the birth order than lower-educated mothers. Amongst first children, those who experienced poor health during infancy yield a higher value than healthy children to their parents.

Keywords: Health; Fertility (search for similar items in EconPapers)
JEL-codes: J13 J22 I12 (search for similar items in EconPapers)
Date: 2001-04-01

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Persistent link: http://EconPapers.repec.org/RePEc:sce:scecf1:267

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