Beyond Population Growth: How Fertility Decisions Shape Household Carbon Footprints

• In Event: Taxation of Households

Abstract

Fertility and population growth are declining in high-income countries, but the environmental implications depend on how consumption patterns shift with household size. If smaller households emit more per person, slower population growth may not reduce greenhouse gas (GHG) emissions as much as expected. This raises questions about the effectiveness of taxes or policies aimed at household size.

I estimate the causal effect of having an additional child on household consumption-based carbon footprint using detailed expenditure data from the U.S. Consumer Expenditure Survey, linked to emissions factors from multiple federal agencies. Two established instruments, sex composition of the first two children and multiple births, identify exogenous variation in fertility in this context.

I document three empirical facts: (1) household carbon footprint increases with the number of children, (2) the marginal increase in emissions declines with each additional child, and (3) an additional child raises household carbon footprint by only about one-tenth of the average per-capita footprint in the U.S. These patterns suggest that larger households consume more food and energy, but they travel less.

Back-of-the-envelope calculations suggest a child’s carbon legacy is significantly smaller than prior estimates in environmental science. Importantly, this paper is among the first to causally estimate the impact of fertility on GHG emissions using microdata. The findings imply that taxes on children or household size would likely be inefficient climate policy tools, and that behavioral responses in consumption must be considered when assessing the environmental impact of demographic change.

Author

• Niaoniao You, University of Michigan