According to the Easterlin hypothesis, the positive relationship between income and fertility is dependent on relative income. The hypothesis presumes that aspirations are significantly determined by family background. If income is high relative to aspirations, individuals will tend to have more children. The definition of variables as sibling differences controls family background and yields a measure of relative income. Analyzing the Kalamazoo Brothers sample in this fashion produces no evidence in support of the hypothesis.

tional attainments suggests the usefulness of special training programs for unskilled immigrants. Further, the persistence of racial differentials underscores the importance of the enforcement of anti-bias employment regulations to protect non-white immigrants. Recent changes in immigration law under the Refugee Act of 1980 will increase uncertainty regarding the composition of future immigration waves. It is likely, however, that the proportion of immigrants for whom specialized training and anti-bias regulation enforcement can hasten the traditional catch-up process which has historically characterized the immigrant economic experience will continually increase. Additional research using more recent data will allow both the efficacy of the recommendations advanced and the persistence of the observed patterns to be tested.

A latent-variable representation of health is used in a system that determines health and various indicators of health and health-care utilization for Nicaraguan women. Estimates differ somewhat from standard estimates. They imply that women's schooling increases health-care utilization, literate women report less disease incidence, women's childhood backgrounds affect their adult health and health-care utilization, and general resources favor childbirth-related care, but women's full income favors general care. The most significant result is that several important characteristics usually associated with development-women's schooling, household resources, and women's labor force participation-have inverse or no associations with women's health. Health status is hypothesized to be important in developing countries, both as a direct indicator of welfare and because of its possible impact on productivity. Health-care utilization also is of interest, both because of its relation to health status and because it is a particular manifestation of demand and supply for a 1 modem service. Work on the determinants of health status and health-care utilization in developing economies, however, is flawed because true health status is not directly observable. The indicators of health status that have been used in empirical studies-anthropometric measures, days ill, self-reported or clinical disease records, inputs such as nutrients, and health-care utilization indicesare imperfect indicators of underlying health status and generally do not give a congruent representation of that status. Thereby they may not measure adequately health status and their use may lead to biases in estimates and incorrect interpretations. We use a latent variable methodology for the first time to explore health status and health-care utilization in a developing country.' This approach employs systematic relations between various indicators of health status and health status itself and between health status and various related outcomes so that it is possible to estimate the determinants of health status and control for health status in other relations, even though health status is not directly observed. By using this methodology we obtain more satisfactory estimates of the determinants of health status and of health-care utilization in a developing country context than previous estimates using direct but imperfect proxies. This should improve the empirical bases for evaluating health and related policies in the developing world. I. Latent Variable Model of Health Status and Health-Care Utilization In the human capital tradition of analysis of health, individual health status is viewed as determined by individual demand factors given supply prices, environment, age and resources (including genes). Health-care utilization is a derived demand for a service which is used to produce better health. To incorporate the latent variable representation of the unobserved health status, we assume that the demand-supply health status and health-care utilization interactions, as well as the relation of other health indicators to health status, can be represented by the following linear system of relations:

gence on fertility and of household size on offspring's intelligence remain the subject of public debate. Most recently, attention has centered on the decline in Scholastic Aptitude Test scores and the possible effects of the postwar baby boom. These concerns suggest that economists would do well to introduce intelligence into the household utility maximization model used to explain differential fertility. We attempt to do this here.

According to the Easterlin hypothesis, the positive relationship between income and fertility is dependent on relative income. The hypothesis presumes that aspirations are significantly determined by family background. If income is high relative to aspirations, individuals will tend to have more children. The definition of variables as sibling differences controls family background and yields a measure of relative income. Analyzing the Kalamazoo Brothers sample in this fashion produces no evidence in support of the hypothesis.