Later-born children fare worse; a possible reason is being an unwanted/unplanned child, which is associated with negative life cycle outcomes as it implies a disruption in parental plans for optimal human capital investment

Birth order and unwanted fertility. Wanchuan Lin, Juan Pantano, Shuqiao Sun. Journal of Population Economics, August 22 2019. https://link.springer.com/article/10.1007/s00148-019-00747-4

Abstract: An extensive literature documents the effects of birth order on various individual outcomes, with later-born children faring worse than their siblings. However, the potential mechanisms behind these effects remain poorly understood. This paper leverages US data on pregnancy intention to study the role of unwanted fertility in the observed birth order patterns. We document that children higher in the birth order are much more likely to be unwanted, in the sense that they were conceived at a time when the family was not planning to have additional children. Being an unwanted child is associated with negative life cycle outcomes as it implies a disruption in parental plans for optimal human capital investment. We show that the increasing prevalence of unwantedness across birth order explains a substantial part of the documented birth order effects in education and employment. Consistent with this mechanism, we document no birth order effects in families who have more control over their own fertility.

Keywords: Birth order Unwanted births Fertility intentions