Sibling Sex Composition and Cost of Children

Type Working Paper
Title Sibling Sex Composition and Cost of Children
Publication (Day/Month/Year) 2011
This paper contributes to the debate over the usage of same-sex sibship as an identifying instrument. Angrist and Evans (1998) use the gender of the first two births, specifically same-sex sibship, as a natural instrument to estimate fertility effects on labor supply. However, the usage of this instrument is often criticized because it implicitly assumes that child costs do no depend on the sibling sex composition. I therefore test this critique and analyze whether families with same-sex siblings face larger economies of scale in consumption by estimating consumptionbased equivalence scales for different household types in a variety of countries. The results are twofold: I find no significant differences between the estimated equivalence scales of families with different sibling sex composition in richer countries. Using data from poorer countries, however, I find that the estimated equivalence scales differ significantly by sibling sex composition.

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