How Does Birth Order Affect Children

J Popul Econ (2009) 22:367–397
DOI 10.1007/s00148-007-0181-4
O R I G I N A L PA P E R

Birth order matters: the effect of family size and birth order on educational attainment
Alison L. Booth & Hiau Joo Kee

Received: 13 January 2006 / Accepted: 9 November 2007 /
Published online: 11 April 2008
# Springer-Verlag 2007

Abstract Using the British Household Panel Survey, we investigate if family size and birth order affect children’s subsequent educational attainment. Theory suggests a tradeoff between child quantity and “quality” and that siblings are unlikely to receive equal shares of parental resources devoted to children’s education. We construct a new birth order index that effectively purges family size from birth order and use this to
In addition, there is a separate negative birth order effect. Our findings are robust to a number of specification checks. In contrast to Black et al. (2005), the family size effect does not vanish once we control for birth order.
There have been many studies estimating the impact of family composition of educational attainment. These typically do not convincingly disentangle birth order from family size effects, as noted by Hanushek (1992), although Ejrnaes and Portner
(2004) employ a measure of relative birth order to try to overcome this problem.1
More recently, an important study by Black et al. (2005) used data for the entire
Norwegian population to estimate the impact of family size and birth order on education, employing dummy variables for birth order. They found that their negative correlation between family size and children’s educational attainment became negligible once they included dummy variable indicators for birth order.
This finding was robust to the use of twin births as an instrument for family size
(twins being an exogenous variation in family size) and to estimating birth order
Rosenzweig and Zhang (2006), for example, show that twins can be a valid instrument for family size if additional information such as birth weight is available. This avenue of investigation is not open to us. As we do not directly observe the respondents’ siblings, it is impossible to control for sex composition within a family and potential correlation between unobservables and endogenous variables. We are also missing some information about family structure for which we would like to control. For example, we do not have information about the gaps between siblings nor do we have data on whether or not there were any stepchildren. This could matter, as parents might be more willing to invest in the education of their biological children rather than their stepchildren from other remarriages. Moreover, previous work by Black et al. (2005) suggested using fixedeffect analysis to account for the possible correlation between the unobservables and the explanatory variables. We cannot use this technique, as we do not observe the same individuals over time. Nonetheless, in spite of these limitations, our dataset provides other information that is unavailable in the vast majority of