A Portfolio Approach to Mortality Shocks and Fertility Choice

Theory and Evidence from Africa

R. Wang, Y. Zhou, E.H. Bulte

Research output: Working paperDiscussion paperOther research output

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Abstract

Abstract: The effects of the HIV/AIDS epidemic on fertility in Africa remains ill understood. To align the contrasting findings of recent empirical research, we develop a portfolio model that captures the potential trade-off between "quantity" and "quality" of offspring. According to this theoretical model, the overall impact of mortality shocks on fertility is heterogeneous, and involves changes in human capital investment strategies. A key prediction is that investment switching and fertility impacts are conditional on income levels. We use African panel data to test the implications of the model, and find strong support for key model predictions. In particular, the impact of HIV prevalence on both fertility and human capital investments varies with income in a manner that is consistent with model predictions.
Original languageEnglish
Place of PublicationTilburg
PublisherEconomics
Number of pages44
Volume2013-051
Publication statusPublished - 2013

Publication series

NameCentER Discussion Paper
Volume2013-051

Fingerprint

Mortality
Africa
Fertility
Fertility choice
Choice theory
Human capital investment
Prediction model
Prediction
Portfolio model
Empirical research
Trade-offs
Investment strategy
Income
Income level
Panel data

Keywords

  • HIV/AIDS
  • Fertility
  • Portfolio
  • Development

Cite this

Wang, R., Zhou, Y., & Bulte, E. H. (2013). A Portfolio Approach to Mortality Shocks and Fertility Choice: Theory and Evidence from Africa. (CentER Discussion Paper; Vol. 2013-051). Tilburg: Economics.
Wang, R. ; Zhou, Y. ; Bulte, E.H. / A Portfolio Approach to Mortality Shocks and Fertility Choice : Theory and Evidence from Africa. Tilburg : Economics, 2013. (CentER Discussion Paper).
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Wang, R, Zhou, Y & Bulte, EH 2013 'A Portfolio Approach to Mortality Shocks and Fertility Choice: Theory and Evidence from Africa' CentER Discussion Paper, vol. 2013-051, Economics, Tilburg.

A Portfolio Approach to Mortality Shocks and Fertility Choice : Theory and Evidence from Africa. / Wang, R.; Zhou, Y.; Bulte, E.H.

Tilburg : Economics, 2013. (CentER Discussion Paper; Vol. 2013-051).

Research output: Working paperDiscussion paperOther research output

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AU - Bulte, E.H.

N1 - Pagination: 44

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N2 - Abstract: The effects of the HIV/AIDS epidemic on fertility in Africa remains ill understood. To align the contrasting findings of recent empirical research, we develop a portfolio model that captures the potential trade-off between "quantity" and "quality" of offspring. According to this theoretical model, the overall impact of mortality shocks on fertility is heterogeneous, and involves changes in human capital investment strategies. A key prediction is that investment switching and fertility impacts are conditional on income levels. We use African panel data to test the implications of the model, and find strong support for key model predictions. In particular, the impact of HIV prevalence on both fertility and human capital investments varies with income in a manner that is consistent with model predictions.

AB - Abstract: The effects of the HIV/AIDS epidemic on fertility in Africa remains ill understood. To align the contrasting findings of recent empirical research, we develop a portfolio model that captures the potential trade-off between "quantity" and "quality" of offspring. According to this theoretical model, the overall impact of mortality shocks on fertility is heterogeneous, and involves changes in human capital investment strategies. A key prediction is that investment switching and fertility impacts are conditional on income levels. We use African panel data to test the implications of the model, and find strong support for key model predictions. In particular, the impact of HIV prevalence on both fertility and human capital investments varies with income in a manner that is consistent with model predictions.

KW - HIV/AIDS

KW - Fertility

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Wang R, Zhou Y, Bulte EH. A Portfolio Approach to Mortality Shocks and Fertility Choice: Theory and Evidence from Africa. Tilburg: Economics. 2013. (CentER Discussion Paper).