Academic journal article Economic Inquiry

The Effects of Education on Fertility: Evidence from Taiwan

Academic journal article Economic Inquiry

The Effects of Education on Fertility: Evidence from Taiwan

Article excerpt

I. INTRODUCTION

It is well acknowledged that education has positive effects on social and economic outcomes, and these effects are important concerns to policy-makers and social scientists. Economists have been interested in the effect of education on economic growth (Lucas 1988; Romer 1990), and on cross-country income disparity (e.g., Mankiw, Romer, and Weil 1992). Another strand of economic research examines the private return to education and finds that the return per year is around 6%--10% (Card 1999). A worker's education also has a spillover effect on other workers' productivity (Acemoglu and Angrist 2000; Iranzo and Peri 2009; Mas and Moretti 2009; Moretti 2004).

Economists are also interested in exploring education's impact on nonmarket outcomes. Previous studies find education to have positive effects on health (Lleras-Muney 2005; Oreopoulos 2007), negative effects on crime participation (Lochner and Moretti 2004), and positive effects on civic engagement and attitude (Dee 2004; Milligan, Moretti, and Oreopoulos 2004). There is also evidence suggesting that parental education has beneficial effects on nonmarket outcomes (Currie and Moretti 2003; Oreopoulos, Page, and Stevens 2006). For a survey on the impact of education on individual nonmarket outcomes, see Grossman (2006).

The causal relationship between education and fertility is an important one, which bears important policy and theoretical implications. Some scholars argued that female education facilitates demographic transition, which accelerates economic development (Caldwell 1980; Cohen 2008; Portes 2006). Underlying the linkage between female education and demographic transition is a negative effect of female schooling on fertility. Female education's potentially negative effect on fertility has led some scholars to advocate the use of female education as a policy tool to spur development (see, e.g., Schultz 2002; Cohen 2008; Lutz and Samir 2011). This negative relation is also assumed in theoretical models of economic growth and development (e.g., De la Croix and Doepke 2003, 2004; Lord and Rangazas 2006; Momota 2009), and fertility behavior (Baudin, de la Croix, and Gobbi 2015).

If the assumption of a negative effect of female schooling on fertility fails, female education as a policy tool for economic development may not be as effective as it was believed and the conclusions drawn by theoretical models based on such an assumption may not be realistic. To understand how education boosts development, to gauge how close some theoretical models of economic growth and development are to reality, and to justify prioritizing female education over other policy tools for development, it is important to empirically ascertain the existence and magnitude of the causal effects of female education on fertility.

There are potentially several channels through which female schooling leads to a decline in fertility. For example, (a) education raises women's income and, thus, time cost so that they choose to have fewer children, (b) education enhances women's health knowledge so that they make better use of contraceptive devices and become better carers for their children, and (c) better educated women have more autonomy in fertility decisions (see, e.g., Michael 1973; Rosenzweig and Seiver 1982; Rosenzweig and Schultz 1985; Schady and Rosero 2008). However, education may also have a positive effect on fertility via its income effect. A better educated women will have higher income and have a spouse with higher income, such that she could afford to have more children.

There are many studies investigating the relationship between female education and fertility. However, apart from McCrary and Royer (2011) and Clark, Geruso, and Royer (2014), most previous studies use the instrumental variable (IV) approach with either the timing (in years) of changes in policy or program intensity (e.g., teacher-student ratio generated by the law changes) as instruments to identify the effect of education on fertility and it is found that education either suppresses or delays fertility. …

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