Birth Order, Family Size and Educational Attainment

This paper investigates the e ect of family size and birth order on educational attainment. An instrumental variables approach is used to identify the e ect of family size. Instruments for the number of children are twins at last birth and the sex mix of the rst two children. The e ect of birth order is identi ed, by examining the relation with years of education for di erent family sizes separately. No signi cant e ect of family size on educational attainment of the oldest child is found. Birth order has a signi cant negative e ect. Potential mechanisms behind the birth order e ects are investigated. The results show that birth order e ects are not a ected by the average age gap between children. Information on nancial transfers shows that earlier born children have a higher probability of receiving money from their parents than later born children, also the amount they receive is higher. These results indicate that the allocation of parental resources is a potential mechanism behind the birth order e ects.