Scandinavian Working Papers in Economics

Göteborg Papers in Economic History,
University of Gothenburg, Department of Economic History

No 22: An introduction to using twin births as instrumental variables for sibship size

Stefan Öberg ()
Additional contact information
Stefan Öberg: Department of Economy and Society, Postal: School of Business, Economics and Law, Göteborg University, Box 720, SE 40530 Göteborg, Sweden

Abstract: Some families who experience a twin birth get one more child than they had intended and planned for. This is the reason why twin births are used to create instrumental variables (IVs) for the number of children in a family. In this chapter I introduce IV techniques in general and the use of twin births for IVs in particular. IVs based on parity-specific twin births can indeed, under certain circumstances, be valid and reliable. In this chapter I discuss what these circumstances are. I rely heavily on the work by Joshua Angrist and coauthors. In contrast to them I argue that it is important to recognize that IVs based on parity-specific twin births have “heterogenous treatment effects”, meaning that it is only for some families that the twin birth leads to an unintended and unplanned birth. Recognizing this highlights a few assumptions that are not always thoroughly acknowledged in previous research. We, for example, need to make assumptions about the possibility of unintended single births and the families experiencing these. It is also the case that including families that have not yet reached (or surpassed) their desired number of children when using IVs based on parity-specific twin births will lead to estimates that are biased towards zero. Most importantly we need to reduce the claims of estimating generalizable, causal effects when using twin birth instrumental variables.

Keywords: instrumental variables; twins; twin births; family size; exogenous variation; causal estimation; sibship size

JEL-codes: C26; C36; J13

28 pages, May 2, 2017

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