Cognitive skills have been shown to be a strong predictor of educational attainment and future labor market success; as a result, understanding the determinants of cognitive skills can lead to a better understanding of children’s long run outcomes. But how do families influence the ability of children? This paper uses a large dataset on the male population of Norway and focuses on one family characteristic: the effect of family size on IQ. Because of the endogeneity of family size, we instrument for family size using twin births and sex composition. IV estimates using sex composition as an instrument show no negative effect of family size; however, IV estimates using twins imply that family size has a negative effect on IQ. Further investigation of the specific features of the twins instrument – the addition of extra children at zero spacing and typically with much lower birth weight than singletons – suggests that the twins estimates are unlikely to generalize to other types of increase in family size. We conclude that there are no important negative effects of planned increases in family size on IQ. Black and Devereux gratefully acknowledge financial support from the National Science

JEL No. I2, J1 Among the perceived inputs in the "production " of child quality is family size; there is an extensive theoretical literature that postulates a tradeoff between child quantity and quality within a family. However, there is little causal evidence that speaks to this theory. Our analysis is able to overcome many limitations of the previous literature by using a rich dataset that contains information on the entire population of Norway over an extended period of time and allows us to match adult children to their parents and siblings. In addition, we use exogenous variation in family size induced by the birth of twins to isolate causation. Like most previous studies, we find a negative correlation between family size and children's educational attainment. However, when we include indicators for birth order, the effect of family size becomes negligible. This finding is robust to the use of twin births as an instrument for family size. In addition, we find that birth order has a significant and large effect on children's education; children born later in the family obtain less education. These findings suggest the need to revisit economic models of fertility and child "production", focusing

the author and do not reflect the views of the DfES. All errors and omissions remain the authors. This paper was presented as part of the Centre for the Economics of Education

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This paper tests the rational-choice approach to fertility decisions by investigating the relationship between parenthood and well-being in a large sample of individuals from 94 countries. We find that worldwide, controlling for demographic and socioeconomic characteristics, having children has a negative effect on well-being. Conditioning on age, gender, marital status and education can only partially help to interpret this finding. We show that the negative effect of parenthood on well-being is explained by a large adverse impact on financial satisfaction, that on average dominates the positive impact on nonfinancial satisfaction. The results are robust to alternative empirical specifications and to the inclusion of the reported ideal number of children as a proxy variable to address the endogeneity of parenthood decisions.