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Increasing the credibility of the twin birth instrument
Max Planck Gesell, Munich Ctr Econ Aging, Munich, Germany;Univ Mannheim, Dept Econ, Mannheim, Germany.
Max Planck Gesell, Munich Ctr Econ Aging, Munich, Germany.
Uppsala University, Units outside the University, Office of Labour Market Policy Evaluation. Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2018 (English)In: Journal of applied econometrics (Chichester, England), ISSN 0883-7252, E-ISSN 1099-1255, Vol. 33, no 3, p. 457-472Article in journal (Refereed) Published
Abstract [en]

Twin births are an important instrument for the endogenous fertility decision. However, twin births are not exogenous either as dizygotic twinning is correlated with maternal characteristics. Following the medical literature, we assume that monozygotic twins are exogenous, and construct a new instrument, which corrects for the selection although monozygotic twinning is usually unobserved in survey and administrative datasets. Using administrative data from Sweden, we show that the usual twin instrument is related to observed and unobserved determinants of economic outcomes, while our new instrument is not. In our applications we find that the classical twin instrument underestimates the negative effect of fertility on labor income. This finding is in line with the observation that high earners are more likely to delay childbearing and hence have a higher risk to get dizygotic twins.

Place, publisher, year, edition, pages
WILEY , 2018. Vol. 33, no 3, p. 457-472
National Category
Economics
Identifiers
URN: urn:nbn:se:uu:diva-352707DOI: 10.1002/jae.2616ISI: 000429712400009OAI: oai:DiVA.org:uu-352707DiVA, id: diva2:1215026
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Ragnar Söderbergs stiftelseAvailable from: 2018-06-07 Created: 2018-06-07 Last updated: 2018-06-07Bibliographically approved

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Vikström, Johan

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