The Effect of Child Endowment on Fertility Choices

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Does the intellectual endowment of children affect parents’ fertility choices? The quantity-quality model of fertility predicts that a positive (negative) shock to child endowment increases (decreases) parental demand for children. We test these predictions using Israeli data on intellectually gifted and intellectually disabled children. Because families with an exceptional-endowment child differ from those without, we propose quasi-experiments that exploit differences in the child’s birth order to estimate the effects of her birth on further fertility. We find that the birth of a gifted child increases family size. However, parents must recognize the endowment’s exceptionality for it to have an effect. Similarly, the birth of an intellectually disabled child negatively affects family size, but only when the child is of high birth order. Our results point to child endowment as an important factor in determining fertility choices.