A household time-allocative model which explicitly takes into account the economic contribution of children in agricultural areas of less-developed countries is applied to direct-level data pertaining to the rural population of India. Joint family decisions concerning fertility and the allocation of male and female child time to schooling and work activities are examined empirically in a simultaneous equations system. The properties of the formal model are used to derive inferences from the parameter estimates with respect to the shadow price configuration influencing these joint decisions.

"In this paper, we formulate a statistical model of dynamic intrafamily investment behavior incorporating endowment heterogeneity and heritability. We use the model's estimates to evaluate alternative estimation procedures that have exploited family and kinship data to obtain estimates of the determinants of human capital." The sequential decision-making framework developed is applied to data on birthweight and gestation of children born to mothers surveyed in the U.S. National Survey of Labor Market Experience youth cohort. "The empirical results imply that the least restrictive statistical formulation, consistent with dynamic behavior and heterogeneity among siblings, fits the data best. All of the estimation procedures that control for a family-specific endowment indicate, however, that the biological effect of having a birth at younger ages is to marginally increase birthweight and to increase fetal growth."

The predictive content of the quantity-quality model of fertility and the empirical information required for verification under a minimal set of restrictions on the utility function is described. It is demonstrated that commodity-independent compensated price effects must be known to infer the existence of the unobservable interdependent shadow prices of the model with a relatively weak structure improsed on preference orderings. A method of using multiple birth events to substitute for these exogenous prices is proposed and applied to household data from India.