POPULATION AND DEVELOPMENT REVIEW 31(3): 407–445 (SEPTEMBER 2005) 407 Partner + Children = Happiness? The Effects of Partnerships and Fertility on Well-Being HANS-PETER KOHLER JERE R. BEHRMAN AXEL SKYTTHE TO EXPLAIN CONTINUED partnership formation and childbearing in low-fertil- ity contexts, most economic and rational-choice approaches to fertility and union formation assume that individuals derive “utility” from being in unions or having children (e.g., Becker 1981). 1 Decisions about fertility and union formation are based on the utility gains achieved by being in unions and/or having children as compared to the utility gains that are incurred from alter- native allocations of resources, such as income or time, that are required to maintain partnerships and raise children. The basic implication of this con- ceptual framework can be empirically investigated. Several recent studies suggest that utility can be measured using information about subjective well- being or “happiness” (e.g., Frey and Stutzer 2002; Layard 2005). If individu- als (1) do not have systematic misconceptions about the benefits of partner- ships and children and (2) make conscious and informed choices about the formation of partnerships and their level of fertility, one would expect that the relation “Partner + Children = Happiness” holds: individuals form unions or have children because these decisions increase their subjective well-being or “happiness.” In sharp contrast, however, as Easterlin (2003, 2005) notes, a growing number of psychologists have argued for a “setpoint theory” of happiness, in which happiness is primarily determined by personality traits and other genetic factors and is highly stable over the life course. In this view, signifi- cant life events, such as the formation or dissolution of unions and the birth of children, only transitorily change an individual’s happiness from a setpoint determined by personality and other genetic traits. Easterlin (2005) pro- vides a number of quotations from the psychological literature that encap-