Diversification in Children

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 15.07.2008, 12:15 - 13:30


Presentation by 

Jinyoung Kim (Korea University)


This paper develops a model of the decisions on the quantity and quality of children that is based on two premises: (1) the quality of children is uncertain when parents make a human capital investment decision, and (2) the quality distributions of two children of a woman are less correlated if they are fathered by different men than by the same man due to genetic inheritance. It naturally follows that a parent looks for reducing the risk of child quality by having children given birth to by different fathers, or by diversifying in children. We derive and test discriminating propositions concerning child diversification and human capital investment in children. Consistent with these propositions, our empirical results indicate that women with less education, more income, and higher income uncertainty are more likely to diversify. We also show that human capital investment in a child fathered by a new mate is lower and higher income uncertainty increases investment.

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