QUANTITY AND QUALITY OF CHILDREN: COMPLEMENTS OR SUBSTITUTES?

Abstract

Using micro-level data, this study investigates the quantity-quality trade-off in the U.S. and three of the poorest countries in the world - Malawi, Tanzania and Uganda, all situated in Sub-Saharan Africa. Many papers have utilised the IV approach to find the effect of one additional child on quality of children. Instead, this study uses OLS regression to understand parents’ simultaneous decisions between quantity and quality of their children; e.g. parents choose to have four children and provide primary education for their children or have two and save up for their college education. This would be done by comparing among households with different income levels. I find that poorer American households and Malawi households view quantity and quality of children as complements while richer Ugandan and American households perceive them as substitutes.1 Tanzania and poorer Ugandan households show statistically insignificant relationship between quantity and quality.