TY - JOUR T1 - Are Children Really Inferior Goods? JF - Journal of Human Resources JO - J Hum Resour SP - 301 LP - 327 DO - 10.3368/jhr.45.2.301 VL - 45 IS - 2 AU - Jason M. Lindo Y1 - 2010/03/01 UR - http://jhr.uwpress.org/content/45/2/301.abstract N2 - This paper explores the causal link between income and fertility by analyzing women’s fertility response to the large and permanent income shock generated by a husband’s job displacement. I find that the shock reduces total fertility, suggesting that the causal effect of income on fertility is positive. A model that incorporates the time cost of children and assortative matching of spouses can simultaneously explain this result and the negative cross-sectional relationship. I also find that a husband’s displacement accelerates childbearing, which is consistent with lifecycle models of fertility in which the incentive to delay is driven by expected earnings growth. ER -