Grandparents' health and family fertility choice: Evidence from Taiwan

The incompatibility of female time allocation between labor supply and child care has been one of the explanations of low fertility rate experienced by many countries. Non-parental care, especially that from grandparents or formal care, helps alleviate the constraint females facing and thus permits the families to have more children. Extending from the theoretical framework in Ermisch (1989), this study incorporates grandparents' health status to provide a theoretical justification for its effect on family size. Based on the data taken from the Panel Study of Chinese Family Dynamics (PSFD) from 2006 to 2011, it is found that grandparents in different age groups exhibit differential influence on family fertility decisions. Specifically, healthy grandparents in the 55–64 age group are found to have a persistent and positive impact on the family's probability of having more children as predicted by the theoretical model. Nonetheless, when grandparents' health effect is compounded by the age effect, more elderly healthy grandparents in the 75-and-up group will reduce the couple's desire for more children. This negative effect can be explained by the couple's consideration of lower childcare quality and larger age gaps leading to great differences in the childcare ideas. The number of healthy grandmothers are found to have an even greater influence on family fertility decisions, suggesting grandmothers still take the major responsibility of childcare in the family and thus constitute an absolutely crucial resource in the Chinese society.