Effects of Schooling on Fertility, Labor Supply, and Investments in Children, with Evidence from Brazil

Abstract

We explore the mechanisms driving the negative relationship between parents' schooling and fertility. Brazilian data demonstrate strong negative effects of women's schooling on fertility over the first eight years of schooling. We observe no increase in women's labor supply, however, in spite of rapidly rising wages, suggesting that reservation wages rise as fast as market wages over this range. We find strong effects of parental schooling on children's schooling and survival. We conclude that the effects of early years of schooling on fertility work primarily through increased investments in child quality, with only a minor role played by rising women's wages.