() and Henry Ohlsson
Michael Lundholm: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden
Henry Ohlsson: Dept. of Economics, Uppsala University, Postal: Department of Economics, Uppsala University, P.O. Box 513, S-751 20 Uppsala, Sweden
Abstract: We study the Becker and Lewis (1973) quantity-quality model of children adding an explicit child care time constraint for parents. They can purchase day care or take care of the children themselves. Our results are: (i) If there is a combination of purchased and own care, the effect of income on fertility is ambiguous, even if quantity of children is a normal good in the standard sense. This is the Becker and Lewis (1973) result. (ii) If, however, there only is purchased care, the income effect on fertility is positive when quantity is a normal good. (iii) If, on the other hand, there only is own care, there is a different kind of quantity-quality trade-off. The income effect on fertility is positive if quantity is a closer complement than quality to the consumption of goods.
9 pages, December 15, 1998
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