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Children as Insurance

Author

Listed:
  • Claus Chr. Pörtner

    (University of Copenhagen Institute of Economics)

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 provides an alternative explanation to the negative relation between fertility and the education of the parents, and especially the mother's education. The model also demonstrates why parents demand children even if the return is negative and explains why fertility might rise with 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. The implications for empirical tests of the demand for children are also examined.

Suggested Citation

  • Claus Chr. Pörtner, 1997. "Children as Insurance," Discussion Papers 97-12, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:9712
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    Cited by:

    1. Richard Evans & Yingyao Hu & Zhong Zhao, 2010. "The fertility effect of catastrophe: U.S. hurricane births," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(1), pages 1-36, January.
    2. Portner, Claus C., 2023. "How Is Fertility Behavior in Africa Different?," SocArXiv jf9um, Center for Open Science.
    3. Helene Bie Lilleør, 2008. "Can Future Uncertainty Keep Children Out of School?," CAM Working Papers 2008-06, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
    4. Arindam Nandi & Sumit Mazumdar & Jere R. Behrman, 2018. "The effect of natural disaster on fertility, birth spacing, and child sex ratio: evidence from a major earthquake in India," Journal of Population Economics, Springer;European Society for Population Economics, vol. 31(1), pages 267-293, January.
    5. Bandara, Amarakoon & Dehejia, Rajeev & Lavie-Rouse, Shaheen, 2015. "The Impact of Income and Non-Income Shocks on Child Labor: Evidence from a Panel Survey of Tanzania," World Development, Elsevier, vol. 67(C), pages 218-237.
    6. Fabre, Alice & Pallage, Stéphane, 2015. "Child labor, idiosyncratic shocks, and social policy," Journal of Macroeconomics, Elsevier, vol. 45(C), pages 394-411.
    7. Grimm, Michael, 2016. "Rainfall Risk and Fertility: Evidence from Farm Settlements during the American Demographic Transition," IZA Discussion Papers 10351, Institute of Labor Economics (IZA).
    8. Bandara, Amarakoon & Dehejia, Rajeev & Lavie-Rouse, Shaheen, 2015. "The Impact of Income and Non-Income Shocks on Child Labor: Evidence from a Panel Survey of Tanzania," World Development, Elsevier, vol. 67(C), pages 218-237.
    9. Finlay, Jocelyn E., 2009. "Fertility response to natural disasters : the case of three high mortality earthquakes," Policy Research Working Paper Series 4883, The World Bank.
    10. Angela Cipollone, 2011. "Education as a Precautionary Asset," Working Papers CELEG 1108, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    11. Kalemli-Ozcan, Sebnem, 2002. "Does the Mortality Decline Promote Economic Growth?," Journal of Economic Growth, Springer, vol. 7(4), pages 411-439, December.
    12. Dick Durevall & Annika Lindskog, 2016. "Adult Mortality, AIDS, and Fertility in Rural Malawi," The Developing Economies, Institute of Developing Economies, vol. 54(3), pages 215-242, September.
    13. Büttner, Nicolas & Grimm, Michael & Günther, Isabel & Harttgen, Kenneth & Klasen, Stephan, 2022. "The fertility transition in Sub-Saharan Africa: The role of structural change," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-90-22, University of Passau, Faculty of Business and Economics.
    14. Kati Kraehnert & Tilman Brück & Michele Di Maio & Roberto Nisticò, 2019. "The Effects of Conflict on Fertility: Evidence From the Genocide in Rwanda," Demography, Springer;Population Association of America (PAA), vol. 56(3), pages 935-968, June.
    15. Ferreira, Frederico Poley Martins & Ávila, Paulo Coelho, 2018. "Who has secure land tenure in the urban areas of Brazil? Evidence from the state of Minas Gerais," Land Use Policy, Elsevier, vol. 75(C), pages 494-504.
    16. Chakrabarty, Sayan & Grote, Ulrike, 2009. "Child Labor in Carpet Weaving: Impact of Social Labeling in India and Nepal," World Development, Elsevier, vol. 37(10), pages 1683-1693, October.

    More about this item

    Keywords

    fertility; mortality; security;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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