Fertility and education premiums

This study examines households’ fertility variations in response to expected permanent shifts in the return to education. Wage premiums measure␣the return to education because their long-run movements are driven by factors exogenous to the fertility process. The results indicate that high education parents’ fertility responds negatively to changes in the expected return to college and negatively to changes in the expected return to high school. On the other hand, the fertility of low education parents does not vary with changes to expected returns to education. These results can be consistently interpreted within a standard quality/quantity model of endogenous fertility. Copyright Springer-Verlag 2003