Jungho Kim
Henriette Engelhardt
Alexia Prskawetz
Arnstein Aassve

http://www.demographic-research.org/volumes/vol20/26/

doi:10.4054/DemRes.2009.20.26

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Abstract
This paper presents an empirical analysis of the relationship between fertility and a direct measure of poverty for Indonesia, a country, which has experienced unprecedented economic growth and sharp fertility declines over recent decades. It focuses on illustrating the sensitivity of the effect of fertility on household consumption with respect to the equivalence scale by applying the propensity score matching method. The analysis suggests that a newborn child decreases household consumption per person by 20 percent within four years. When the estimates of equivalence scales implied by the Indonesian sample are applied, the effect of a child on household consumption is still negative, but the magnitudes are in the range from 20 to 65 percent of that found with the per-capita expenditure as a measure of consumption. Therefore, it is suggested that the analysis based on the conventional measure of poverty is likely to exaggerate the effect of fertility on poverty at least because of the neglect of the proper equivalence scale.

Author's affiliation
Jungho Kim
Korea Development Institute, Korea, Republic Of
Henriette Engelhardt
Otto-Friedrich-Universität Bamberg, Germany
Alexia Prskawetz
Vienna University of Technology, Austria
Arnstein Aassve
Universita Bocconi, Milano, Italy

Keywords
consumption, equivalence scale, fertility, Indonesia, poverty dynamics

Word count (Main text)
7841

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