E2025005                                                                   2025-03-11

Rufei Guo   Junjian Yi     Junsen Zhang    Ning Zhang

Abstract
We develop a generalized theory of rationed fertility to analyze treatment effect h eterogeneity i n the child quantity–quality tradeoff. An exogenous increase in fertility can be either desired or undesired. We derive a positive rationing income effect on child quality for desired fertility increases, but a negative ra-tioning income effect for undesired fertility increases. We propose an econometric framework to identify treatment effects of desired and undesired fertility increases, and estimate a structural model to gauge the quantitative importance of the novel rationing income effect. Our study highlights the importance of distinguishing between desired and undesired changes when evaluating social programs.

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