Is there really a trade-off? Family Size and Investment in Child Quality in India

We address the relationship between number of children and investment in child quality, known as Quantity-Quality (Q-Q) trade-off, for India. Using a number of investment and outcome measures, we find that the OLS estimates suggest presence of Q-Q trade-offs in 9 out of 10 measures considered. Using the gender of the first-born child as an instrument, the trade-offs in all measures disappear. Given the concerns about the exogeneity of the instrument, we apply Oster (2016) bounds to assess sensitivity of OLS estimates to omitted variables. We find robust trade-off estimates in only 3 measures---enrollment, years of schooling, and height-for-age. However, we find more robust trade-offs in rural areas. Trade- offs appear in ever enrolled, private school attendance, expenditure on education and private coaching in addition to the trade-offs in the 3 measures for all India sample.