1Small Family, Smart Family? Family Size and the IQ Scores of Young Men* by Sandra E. Black Department of Economics UCLA NHH, IZA and NBER [email protected] Paul J. Devereux School of Economics and Geary Institute, University College Dublin, CEPR and IZA [email protected] Kjell G. Salvanes Department of Economics Norwegian School of Economics, Statistics Norway, Center for the Economics of Education (CEP) and IZA [email protected] July 2008 Abstract This paper uses Norwegian data to estimate the effect of family size on IQ scores of men. IV estimates using sex composition as an instrument show no significant negative effect of family size; however, IV estimates using twins imply that family size has a negative effect on IQ scores. Our results suggest that the effect of family size depends on the type of family size intervention and that there are no important negative effects of expected increases in family size. However, unexpected shocks to family size resulting from twin births have negative effects on the IQ scores of existing children. * Black and Devereux gratefully acknowledge financial support from the National Science Foundation and the California Center for Population Research. Salvanes thanks the Research Council of Norway for financial support. We would like to thank Josh Angrist and seminar participants at UCD Geary Institute, Pompeu Fabra, CEMFI Madrid, the Society of Labor Economists, and the CEPR conference on The Formation and Use of Human Capital and Knowledge in Bergen, Norway for useful suggestions. We are grateful to the Medical Birth Registry for Norway for providing the birth registry data. We are also indebted to Stig Jakobsen who was instrumental in obtaining data access to the IQ data from the Norwegian Armed Forces.2Researchers have long reflected on the role of families in influencing the intelligence of their children. Given evidence that intelligence is in part determined by the genetic structure of parents, is there room for post-birth family characteristics to play a role? If yes, how big is this effect? In this paper, we focus on the role of one family characteristic: the effect of family size on IQ test scores. Family size has long been of interest to researchers, particularly because of the strong empirical regularity that children from larger families tend to have poorer outcomes. There is an extensive theoretical literature on the tradeoff between child quantity and quality within a family that dates back to Becker (1960) and Becker and Lewis (1973). The theory is often cited and is used as the basis for many macro growth models (see Becker and Barro (1988) and Doepke (2003)). A key element of the model is an interaction between quantity and quality in the budget constraint that leads to rising marginal costs of quality with respect to family size; this generates a tradeoff between quality and quantity.1 But is this tradeoff real? In particular, is it true that having a larger family has a causal effect on the “quality”, or IQ, of the children? Or is it the case that families who choose to have more children are (inherently) different, and the children would have lower IQs regardless of family size? This paper uses a dataset on the male population of Norway to examine the effect of family size on children’s IQ, an outcome not previously available in datasets of this size. Importantly, we also address the issue of the endogeneity of family size. Until recent years, the empirical literature on the effects of family size on child outcomes generally relied on OLS estimation and found a negative relationship between family size and child “quality” (usually 1 Rosenzweig and Wolpin (1980) explicitly derive the assumptions under which an exogenous increase in family size should have a negative effect on child quality.3education), even after controlling for socio-economic factors.2 However, few of these findings can be interpreted as causal; family size is endogenously chosen by parents and hence may be related to other, unobservable parental characteristics that affect child outcomes.3 Also, the absence of information on birth order often means that birth order effects are confounded with family size effects. We are unaware of any studies of IQ that have attempted to deal with both of these issues. There is, however, a literature on the causal effects of family size on child educational attainment, starting with Rosenzweig and Wolpin (1980). Recent papers in this literature use arguably exogenous variation in family size induced by the sex composition of children (parents have a preference for variety and so are more likely to have an additional child if the first two are the same sex) and/or the birth of twins (resulting in a family size increase of two when one was expected) and have generated very little evidence for any quantity-quality tradeoff (Conley and Glauber 2006; Caceres-Delpiano 2006; Angrist et al. 2006). In recent work (Black, Devereux and Salvanes 2005), we use Norwegian data on cohorts born between 1912 and 1975 and variation in family size induced by the birth of twins to examine the effects of family size on education and earnings. We find little evidence for any family size effect either in the OLS or IV estimates. In this paper, we can study a more recent set of cohorts -- all individuals in our sample were born between 1967 and 1987 -- and are able to introduce previously unavailable information on IQ and birth endowments including birth weight. Given the two types of interventions the instruments represent—one (sex composition) is a planned increase in family size based on parental preferences for variety in the sex composition of their children and the other (twin births) is an unplanned shock to family size resulting in two 2 See Blake (1989) and the numerous studies cited therein.4generally lower-birth weight children with zero spacing--it is somewhat surprising that researchers so far have found similar effects of family size on child outcomes using the twins and sex composition instruments (for example, Angrist et al. 2006). In contrast, our estimates differ depending on estimation method. OLS estimates using a rich set of controls suggest that there is no strong relationship between family size and IQ. Likewise, IV estimates using sex composition as an instrument show no significant negative effect of family size (and are precise enough to rule out large negative effects).