welfare of families relies on the sex composition of births, and has serious drawbacks. This
variable may significantly affect parents’ decisions on whether to have further children, and it
may be assumed to be approximately independent of parent preferences or family constraints if
there is no sex-selective abortion or infanticide. But this variable may not satisfy the criteria for a
valid instrument, because the social and economic consequences of a child’s sex involve many
culturally distinct costs and benefits for his or her parents, such as the provision of dowries for
daughters in some parts of the world. Thus, the sex composition of early births is likely to involve
lifetime wealth effects for parents, in addition to affecting fertility, giving rise to many changes in
family time allocation, expenditure patterns, and life-cycle savings (Rose, 2000). Therefore, the
sex composition of children is not an instrumental variable for estimating how parents respond to
a change in their fertility due to a population policy, if income and other family constraints are
held constant. Finally, it should be noted that population policies may on the one hand subsidize
learning and use of birth control, or at the other extreme fix a birth quota, as in China. There is no
reason to expect expanding voluntary choices in the first case will have the same effect as
rationing choices in the other policy regime.
Conclusions and research challenges
Parents may altruistically internalize in their fertility decisions the effects of their fertility on their
welfare and that of their children, including investments in child quality and lifetime savings in
financial assets (Becker, 1981). These parents are typically assumed to have secure property
rights to their savings and access to financial institutions that minimize credit constraints.
Population policies that reduce the cost of avoiding unwanted births may also be expected to
affect gender empowerment, which does not enter decisively in the unitary model of the family
proposed by Becker, but emerges in various recent bargaining and collective models of the
family. Women may differentially gain from improved control of reproduction, because they
physically bear the health costs of having births and invest disproportionately their time in child
rearing. To derive predictions on how family bargaining affects fertility or vice versa requires
more context-specific assumptions. Do mothers or fathers value children more highly? Does
improved birth control technology empower women to bargain for a larger share of the gains from
marriage? These remain open questions for more study. Women may value children as much as
men do, and use their own increases in wealth to have more. Increased unearned income owned