A Theory of Child Adoption

Abstract

Women can bear own children or adopt them. Extending economic theories of fertility, we provide a first formal theoretical treatment of the demand for adoption. It is shown that the propensity to adopt a child increases in the degree of own altruism, infertility, relatedness and emotional attachment to the child, costs of own child birth, and any adoption-specific monetary return that is received net of the costs of adopting the child. Aggregate adoption statistics are broadly consistent with the predictions of our model.