Two Essays on the Economics of Marriage and Fertility

Junsen Zhang


The first essay discusses some economic implications of marriages of children. Of particular interest is the strategic behaviour of the parents of the children. A simple two-period model with very general assumptions is developed and some interesting results are obtained. These results are summarized in eight propositions. This essay consists of four parts. It is first shown that a symmetric Nash equilibrium does not exist unless constraints are imposed. We find that such an equilibrium does exist if bequests are non-negative, if bequests to sons and daughters are equal, and if preferences are heterogeneous. The second part of the essay looks at how one set of parents will react to the actions of another set by adjusting the level of bequests to sons and daughters. The theoretical model yields reasonable predictions of parental behaviour. The third part examines the efficiency of a Nash equilibrium when it exists and proves that a Nash equilibrium is Pareto-inefficient. Corrective policies are suggested. Finally, the results of the theoretical analysis are found to be independent of whether fertility is exogenous or endogenous. Furthermore, a conjecture by Edgeworth is confirmed by the model: individual decision makers are likely to ignore the impact of their fertility choices on population growth, and when this occurs underpopulation is inevitable. The second essay investigates socioeconomic determinants of individual fertility in China, utilizing a valuable micro-data set (China's 1985 In-Depth Fertility Survey). The Chicago Model, Easterlin's Theories and Leibenstein's Model are used to develop an econometric model of fertility for China. The model incorporates some special features of Chinese societies that are relevant to fertility behaviour. Ordinary least squares, Tobit maximum likelihood and sequential logit procedures are applied to estimate the model. Several theoretic and statistical problems are discussed and appropriate ways are used to take them into account whenever possible. It is found that marriage duration, child mortality, sex preference, education of woman, occupation of husband, family structure, and durable ownership are significant factors in determining individual fertility. Marriage duration, replacement effect of child deaths and male preference for children all appear to be positively related to fertility. The relationship between level of education of woman and fertility is not linear. Furthermore, it is found that fertility falls as occupational status of husband rises, that women living in extended families have higher fertility, and that owning a durable has a negative effect on fertility.