A negative correlation between fertility and income has widely been shown in theoretical
models and corroborated with empirical evidence. Rich countries have on average
low fertility rates, whereas poor countries show higher fertility rates.1
Yet, when it comes to pin down the causal impact of fertility on income, results are
more mixed. The apparent negative correlation seems to be rather driven by an omitted
variable bias. Factors such as women’s income, access to family planning, parents’ education,
among many others, might affect both preference for children and earning capacity.
The most recent economic literature has indeed shown that the negative association disappears
when the endogeneity of fertility is taken into account with adequate identification
strategies.2 To date, studies have mainly considered the impact of fertility on children’s or
maternal outcomes, but not on household income nor on other household-level outcomes
that could proxy for it.3
In the context of developing countries there is still no empirical
investigation of the causal relation between changes in fertility and income.