The value of children: Inter-generational support, fertility, and human capital

- More children improves family-provided old-age support, despite the qq trade-off
- Parents with more children are less likely to work past retirement age
- The fertility-transfer relationship cannot be explained by lower parental savings
- I find no gender effects in the provision of old-age support
- The effect (as a fraction of household income) is stronger for rural parents

This paper offers robust empirical evidence of a Darwinian pro-natalist mechanism: parents can improve their old-age support with an additional child. Using the incidence of first-born twins as an instrument for fertility outcomes, I find that Chinese senior parents with more children receive more financial transfers and are more likely to co-reside with an adult child. They are also less likely to work past retirement age. The estimated effects are large, despite the evidence that adult children from larger families are less educated and earn significantly less. Interestingly, the effect of an increase in the number of children on old-age support does not depend on the child's gender.