RT Journal Article SR Electronic T1 Are Children Really Inferior Goods? JF Journal of Human Resources JO J Hum Resour FD University of Wisconsin Press SP 301 OP 327 DO 10.3368/jhr.45.2.301 VO 45 IS 2 A1 Jason M. Lindo YR 2010 UL http://jhr.uwpress.org/content/45/2/301.abstract AB 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.