The effect of birth order and family size on educational outcomes in Germany: An empirical assessment of the quantity-quality trade-off of children

Details

Supervisors

Catherine Guirkinger

Faculty

Faculté des sciences économiques, sociales, politiques et de communication

Degree label

Master [120] en sciences économiques, orientation générale, à finalité spécialisée

Abstract

By employing German longitudinal data from 2006 to 2017, this paper studies the causal effect of family size and birth order on educational outcomes in terms of school levels and test scores. The quantity-quality trade-off model of children envisages a negative trade-off between child quantity and -quality; children from larger families are to experience lower child quality due to fixed budget constraints. In addition, a higher birth order is expected to influence child quality negatively due to the possibility of additional time constraints and depletion of resources. To ensure the exogeneity of family size, an instrumental variable approach based on multiple births and the gender composition of the first two children is applied. Furthermore, a variable for relative birth order is generated to guarantee the full reduction of correlation between birth order and family size. The causal results suggest that with inclusion of said instrumental variables, the child quantity-quality model is overall, no longer supported. Nevertheless, birth order seems to relate negatively to the chances of a last-born in attending higher secondary education compared to the first-born within the same household. Studying the effect of family size and birth order to children’s outcomes has the potential to contribute to the understanding of the determinants of child welfare and economics of fertility, and eventually provide policy implications to promote economic development in both developed- and developing countries.