BY SANDRA BLACK PAUL DEVEREUX KJELL SALVANES QUARTERLY JOURNAL OF ECONOMICS, 2005 The More the Merrier? The Effect of Family Size and Birth Order on Children’s Education

Central Question How do family size and birth order affect adult outcomes like education? Uses twins & sex mix instruments to estimate effect of family size (similar to Angrist, Lavy, Schlosser). *AND* Considers the role that birth order might play in explaining effects of size.

Why do we care? Informs our understanding of the child production function—specifically, is there a quantity/quality tradeoff? Policies affecting (directly or indirectly) fertility and family size. Increasing (Russia, Canada) or decreasing (China, India, Indonesia)

Angrist, Lavy, & Schlosser (2010) Multiple Experiments for the Causal Link Between the Quantity and Quality of Children Uses IV strategy to identify a causal effect of family size on child quality, as measured by outcomes like child education Instruments are: Twins Sibling sex mix Above with variations across ethnic groups, birth order 1983 and 1995 Israeli Census

The IV Strategy Use the following as instruments for family size to estimate the effect of size on outcomes of older kids: I. Twins in the 2 nd or 3 rd birth II. Sex mix of first two children Two conditions:

Table 3: First Stage for Twins

Table 4: First Stage for Sex Mix

The Exclusion Restriction The second condition: Possible concerns:

Table 5 (ALS)

BLS: Family Size Use IV strategy similar to ALS Add controls for family background and birth order Data Adult population of Norway, Can match parents to their children, and determine birth order About 1.4 million children from 647,000 families.

Table 2

Table 3

Table 3 (continued)

Table 4: Regression Analysis

Are big families bad for kids?

Note Table 4 coefficients on birth order Twins IV: Twins increase family size by.7 to.8 With IV, do not find evidence of large negative effects of family size Same Sex IV: Same sex increases prob. of 3 rd birth by.086 Find large positive effect of family size, though they don’t believe it. Question: ALS & BDS both find no negative effects of family size. What do you think is going on? More on Family Size

First, how might birth order affect education? Birth Order

Challenges with estimation: 1. Family size: how do you separate the effect of being the 10 th kid from the effect of being in a family with 10 kids? 2. Cohort effects: later-born kids are always born more recently. 3. Age of parents: parents of first-borns are younger. 4. Spacing: may be correlated with order Can handle all of these things with enough controls, but need really good data to observe them all. --BDS have, and can also include family fixed effects: what is the within-family effect of birth order? Birth Order

19 Is being (one of) the youngest bad for kids?

20 Is being (one of) the youngest bad for kids?

21 Is being (one of) the youngest bad for kids?

Birth Order: More Results Birth order effects larger for women May also be larger for higher-SES parents Not due to marital dissolution (though only-child effect may be) High birth order also negatively associated with wages and LFP, especially for women.

Birth Order: More Results From Table IX:

Conclusions Much of the observed negative relationship between family size & outcomes seems to be driven by birth order. As families get smaller, average outcomes will improve, but only because there are fewer high birth-order kids. “The difference in educational attainment between the first child and the fifth child in a five-child family is roughly equal to the difference between Black and White...” Question: Why does birth order matter?