We examine Becker's (1960) contention that children are “normal.” For the cross-section of non-Hispanic white married couples in the United States, we show that when we restrict comparisons to similarly educated women living in similarly expensive locations, completed fertility is positively correlated with the husband's income. The empirical evidence is consistent with children being “normal.” In an effort to show causal effects, we analyze the localized impact on fertility of the mid-1970s' increase in world energy prices, an exogenous shock that substantially increased men's incomes in the Appalachian coal-mining region. Empirical evidence for that population indicates that fertility increases with men's income..

We use unique data from the Medicaid program of the Commonwealth of Kentucky to examine the duration of Medicaid spells. The data set consists of a one-in-ten sample of all Medicaid recipients in Kentucky on July 1, 1986, and a similar sample of all new spells between July 1, 1986, and June 30, 1987. Because the beginning date of Medicaid recipiency is known for all spells, this mixed “stock” and “flow” sample allows us to identify the duration of Medicaid spells for up to twenty years. This is in contrast to other studies using short panels of new spells.We find significant differences in hazard functions across program eligibility categories, suggesting that the cost of expanding Medicaid or the savings from contracting it would vary depending on the eligibility group affected by the change in policy.