Autor: de la Mata Dolores, Berniell Lucila, Bonavida Cristian
Institución: CAF-banco de desarrollo de América Latina y el Caribe
JEL: J13, I21
We study the relationship between family size and children’s human capital, commonly referred to as the “quantity-quality trade-off” following Becker and Lewis (1973), in Latin American countries. Despite a history of elevated fertility rates in this region and a rapid convergence to the fertility levels in high-income countries, little is known on whether family size negatively affects investments in children’s human capital. The evidence for other regions have challenged the existence of such trade-off. We use 10% public-use micro-data samples from the census of five Latin American countries with relatively high fertility rates. We employ a twin instrumental variable approach to estimate the causal effect of family size on educational attainment of children born prior to the twin birth. We shed light on the potential mechanisms affecting the relationship between family size and children’s human capital outcomes when: i) financial restrictions are binding, ii) returns to education are low, iii) parental investments decisions are affected by gender norms; iv) formal education supply is scarce. Our results indicate the existence of a quantity-quality trade-off that is related to households’ financial restrictions, gender norms and the provision of school services at the district of residence.