Does Fertility Decrease the Welfare of Households?: An Analysis of Poverty Dynamics and Fertility in Indonesia

Jungho Kim, Vienna Institute of Demography
Henriette Engelhardt, Austrian Academy of Sciences
Arnstein Aassve, University of Essex

It is generally accepted that lower population growth is associated with positive economic development. Although there is a large body of literature supporting this hypothesis at the macro level, few studies have analyzed the causal effect of fertility on household welfare at the micro level. This paper presents an empirical analysis of the relationship between household welfare and fertility applying propensity score matching methods. Further, we test for the sensitivity of our results with respect to alternative measures of welfare at the household level. When consumption expenditure per person is used as a welfare measure, the analysis suggests that the effect of fertility on household welfare is sensitive to the choice of equivalence scales. The lower these values are the less likely will an additional child depress household welfare. When the food share of household expenditure is used as a welfare measure, fertility does not lower household welfare.