Journal of Population Economics

, Volume 14, Issue 1, pp 119–136

Children as insurance

  • Claus Chr. Pörtner

DOI: 10.1007/s001480050162

Cite this article as:
Pörtner, C. J Popul Econ (2001) 14: 119. doi:10.1007/s001480050162

Abstract.

This paper presents a dynamic model of fertility decisions in which children serve as an incomplete insurance good. The model incorporates uncertainty about future income and the survival of children as well as a discrete representation of the number of children. It contributes to the understanding of the negative relation between fertility and education, shows why parents may demand children even if the return is negative, and explains why fertility might rise with increasing income when income is low and decrease when income is high. Furthermore, the model can account for the decline in fertility when the risk of infant and child mortality decreases. Finally, the implications for empirical tests of the demand for children are also examined.

JEL classification: J13O12D11
Key words: Fertilitymortalityinsuranceuncertainty

Copyright information

© Springer-Verlag Berlin Heidelberg 2001

Authors and Affiliations

  • Claus Chr. Pörtner
    • 1
  1. 1.University of Copenhagen, Institute of Economics, Studiestraede 6, 1455 Copenhagen K, Denmark (Fax: 45-35323085, e-mail: claus.poertner@econ.ku.dk)DK