Suffer the little children: Measuring the effects of parenthood on well-being worldwide

Abstract

This paper investigates the relationship between parenthood and well-being in a large sample of individuals from 94 countries worldwide. We find that having children is negatively related to well-being. Conditioning on economic and socio-demographic characteristics can only partially help to explain this finding. We show that the negative effect of parenthood on well-being is explained by a large adverse impact on financial satisfaction, that dominates the positive impact on non-financial satisfaction. The results are robust to the use of alternative empirical specifications and to the inclusion of the reported ideal number of children as a proxy variable to account for the endogeneity of parenthood decisions.

Introduction

One of the fundamental choices in a human being’s lifetime is: Should I have children? And, if so, How many children should I have? These questions have been widely analyzed in the social sciences within the multidisciplinary literature on the determinants of fertility e.g. (Centers and Blumberg, 1954, Fawcett, 1988, Friedman et al., 1994, Hakim, 2003, McLanahan and Adams, 1987, Rodgers et al., 2001, Billari and Kohler, 2004). In recent years, low fertility rates in developed countries have been at the center of the policy debate (see e.g. European Commission, 2005, European Commission, 2007). As a consequence, an increasing number of studies have been devoted to a better understanding of the determinants of the decision to have children (see Feyrer et al., 2008, for a recent review).

The motivations to have children can be related to three main areas: biological predispositions, social pressure, and rational choice (see Morgan and Berkowitz, 2001, for a discussion). The rational-choice approach to fertility assumes that individuals derive utility from having children: “As consumer durables, children are assumed to provide ‘utility’. The utility from children is compared with that from other goods via a utility function or a set of indifference curves” (Becker, 1960, p. 211). Within this framework, decisions about childbearing are based on the net utility gains achieved through parenthood (Becker, 1960, Becker, 1981, Becker and Gregg Lewis, 1973, Willis, 1973).

Despite its popularity, the rational-choice approach to fertility decisions has received relatively little attention at the empirical level. A number of studies have investigated the determinants of household fertility decisions, such as family income, female education, employment and wage (see e.g. Liefbroer, 2005; Milligan, 2005; see also Hotz et al., 1997, for a review of the early literature). More recently, a second group of studies has aimed at directly assessing the net utility gains achieved through parenthood, by using data on subjective well-being at individual level (e.g. Kohler et al., 2005, Winkelmann, 2005, Angeles, 2009, Hansen et al., 2009). This paper belongs to the latter group, as it addresses empirically the question: What are the net utility gains that an individual obtains from having children?

We present the results of a comprehensive investigation of the effects of parenthood on individual well-being, using data for 94 countries representing about 90 percent of the world population. Our analysis contributes to the existing literature in several respects. First, whereas most of the available evidence is based on country-specific relatively small samples, this is the first study that relies on a large sample of individuals at worldwide level. Second, in order to better understand the well-being effects of having children, we decompose the overall impact of parenthood on life satisfaction into the respective effects on financial and non-financial satisfaction. Third, despite relying on a cross-sectional data set, we explicitly address the endogeneity of parenthood by using the reported ideal number of children as a proxy variable to capture the role of unobserved factors that might determine both childbearing decisions and subjective well-being at individual level.

Our results indicate that worldwide, controlling for a number of economic and socio-demographic characteristics, having children is negatively related to subjective well-being. Conditioning on individual characteristics can only partially explain this finding: the effect of parenthood on well-being is positive only for widowers and older individuals, representing a very small fraction of the population. We show that the overall negative effect of parenthood on well-being is explained by a large adverse impact on financial satisfaction, that dominates the positive impact on non-financial satisfaction. These results are robust to the use of alternative empirical specifications and estimation methods, and to the inclusion of the reported ideal number of children among the regressors to account for potential omitted variable bias.

The remainder of the paper is structured as follows. Section 2 discusses the related literature. Section 3 describes the methods and the data set used for the empirical analysis. Section 4 presents the results. Section 5 concludes with a discussion of the main implications of the analysis. Additional details on the data set are provided in the Data Appendix.