“An economic analysis of fertility.” Demographic and Economic Change in Developed Countries. 225-256.
Objective of article is to develop an economic theory to explain variations in fertility in the US in the first half of the twentieth century
- The growth of knowledge about contraception gave parents more control over how many children to have
- Children can be thought of as a consumption good (like a car or house) in that they provide utility
- Parents decide how many children to have (quantity) and how much to spend on each child (quality)
- Becker predicts that a rise in individual income substantially increases the amount that couples spend on children and slightly increases the number of children desired
- Unlike Malthus, he does not believe that increases in income will lead to large increases in quantity of children
- Malthus did not recognize that couples would decrease their fertility in the face of reductions in child mortality
- Richer families spend more on children than poorer families; i.e. the rich have “higher quality children”
- Quantity is a close substitute for quality, therefore families with lots of kids spend less per child than families with fewer kids
Becker than examines his theory empirically
- At first glance, data suggests that wealthy families have fewer children than poor families
- Becker predicts that this may be due to poorer families’ lack of knowledge of contraceptive techniques, not to the preferences of rich versus poor families
- In fact, evidence suggests that rich families desire more children than poor families, although rich families tend to have fewer children
- Further evidence also suggests that as knowledge about contraception spread after WWII, the fertility of poor couples fell more than the fertility of rich couples
Thus, controlling for contraceptive knowledge and use reveals a positive relationship between income and fertility at the individual level (In 1960)
- At the macro level as well, cyclical variations in the business cycle correspond to changes in fertility
- When times are tough, fertility at the national level has fallen, and in times of prosperity it has risen
- However, one may argue that over time, per capita income in the US has risen while fertility has decreased
- Becker argues that this is attributable to a decline in child mortality, an increase in contraceptive knowledge, and a rise in the cost of children
- The cost of children has risen due to legislation prohibiting child labor and requiring education, as well as due to the movement of many families from rural to urban areas, where raising kids is more expensive
- In sum, “it seems that the negative correlation between the secular changes in fertility and income is not strong evidence against the hypothesis that an increase in income would cause an increase in fertility—tastes, costs, and knowledge remaining constant.”
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