Rationed Fertility: Treatment Effect Heterogeneity in the Child Quantity-Quality Trade-Off

Rufei Guo, Junjian Yi, Junsen Zhang and Ning Zhang

Journal of Political Economy, 2025, vol. 133, issue 10, 3349 - 3386

Abstract: We develop a generalized theory of rationed fertility to analyze treatment effect heterogeneity in the child quantity-quality trade-off. An exogenous increase in fertility can be either desired or undesired. We derive a positive rationing income effect on child quality for desired fertility increases but a negative rationing income effect for undesired fertility increases. We propose an econometric framework to identify treatment effects of desired and undesired fertility increases and estimate a structural model to gauge the quantitative importance of the novel rationing income effect. Our study highlights the importance of distinguishing between desired and undesired changes when evaluating social programs.

Date: 2025
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