Children as insurance

Claus Pörtner

Journal of Population Economics, 2001, vol. 14, issue 1, 119-136

Abstract: This paper presents a dynamic model of fertility decisions in which children serve as an incomplete insurance good. The model incorporates uncertainty about future income and the survival of children as well as a discrete representation of the number of children. It contributes to the understanding of the negative relation between fertility and education, shows why parents may demand children even if the return is negative, and explains why fertility might rise with increasing income when income is low and decrease when income is high. Furthermore, the model can account for the decline in fertility when the risk of infant and child mortality decreases. Finally, the implications for empirical tests of the demand for children are also examined.

Keywords: Fertility; ·; mortality; ·; insurance; ·; uncertainty (search for similar items in EconPapers)
JEL-codes: D11 J13 O12 (search for similar items in EconPapers)
Date: 2001-05-04
Note: Received: 8 September 1998/Accepted: 9 June 1999
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Citations: View citations in EconPapers (19)

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Working Paper: Children as Insurance (1997)
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