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Applied Microeconomics Group Seminar The Birth Order Effect: A Modern Phenomenon

Speaker: Dr Ana Nuevo-Chiquero, University of Edinburgh and IZA

Abstract: We provide a historical perspective on the birth order effect and its contributions to the observed quality-quantity tradeoff in families by examining differences in adult economic outcomes among male siblings in 19th and early 20th century Netherlands. Using a rich historical Dutch family-linked administrative birth and marriage registry records, we analyze the role of family composition and socio-economic status on estimates of the birth order effect using family-fixed effects models. Consistent with findings in modern developed countries, we find that later-born males have lower-ranked occupations than their earlier-born brothers. Also consistent with evidence from emerging economies like India and China, this birth order effect is primarily driven by differences between the first- and the last-born and by the number of males in the family. Interestingly, birth order differences–particularly the first-born advantage–are larger among socio-economically advantaged families and in more urbanised areas, while the opposite is true for the last-born effect. Surprisingly, we do not find any evidence that the birth order effect is driven by inheritance rules or transmission of occupations to children born earlier. Taken together, our findings suggest that birth order effects and quantity-quality tradeoff in families, are not only modern phenomena but have been a source of intra-household inequality throughout centuries.

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