The Cost of Children When Children are a Choice

Ugo Colombino

LABOUR, 2000, vol. 14, issue 1, 79-95

Abstract: The standard methods of measuring the cost of children are flawed because of the endogeneity of fertility decisions and because — even if they were exogenous — children bring (or may bring) utility to the household. This paper presents a simple structural model of household allocation of time and income to ‘children’s (quantity and quality) production’. From the estimates one can compute the cost of children as the market value of resources devoted to children. Some policy simulations illustrate the relevance of accounting for the endogeneity of children.

Date: 2000
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