The Microeconomic Theory of Fertility

from “Policy implications of the next world demographic transition” by Harbison and Robinson (2002)Studying in Family Planning 2002; 33[1]:37-48

In the last several decades, the economic theory of fertility has been the dominant explanation paradigm. This model takes the individual or the couple as the decision making unit and assumes that they exercise a conscious and deliberate control over their childbearing, with respects to the number and the timing of offspring.

This is to assume that having children cost money and energy and children generate kind of “utilities” (pleasure and benefit) for their parents. The decision of childbearing is to maximize the gain subject to resource constrain, is the cost and benefit analysis.

Becker (1991) argues that children generate a unique kind of utility that does not compete with other types of pleasure and rewards to the couple. He suggests that the couple may aim at maximizing an intergenerational dynastic utility function, so that the couples see themselves as acting for future generations in a continuing lineage.

Alexander and others find no reason for thinking that the couples will always find having children necessary in order to achieve the “wealth, power, and status” that most people seen to crave (Alexander 1988:327) The family size decision is a function of a host of variables including the characteristics of the couples, process and availabilities of other products in the market and taste.

After years of power social propaganda on family planning, the fertility has fallen. However the new concern over the low total fertility rate (TFR) in developed counties, (even in developing countries) rises. Some see the current TFR in some countries below replacement rate as temporary (Westoff 1991). Presently above replacement populations are exporting migrants to the below-replacement nations, these movements are intensified by political and social unrest in the exporting countries and also threaten to change the ethnic and cultural landscape in receiving countries. Therefore public policies in respond to such movement are expected.

In Europe, nearly all government adopted a pronatalist policy, including family allowance, baby bonus, tax incentive, provision to maternal and child health care facilities etc. The impact of these programs on fertility has been studied by many researches. Most of these studies found no conclusive evidences, the results vary from country to country.

According to author, some prerequisites of future pronatalist policy can be suggested in light of apparent prevailing socioeconomic trends:

1. Policy has to be embedded in health, education and family support for prospective mothers.
2. Policy has to offer meaningful economic support and motivation for a woman to bear a child.
3. Policy has to use mass media campaign aimed at changing public attitudes and climate of public opinion towards fertility.

The implementation of the pronatalist measures would be expensive. The costs would include: reimbursing a woman (for her employer) for her time lost in pre and postmaternal leave; providing nursery and day care for the children; offer health care and other necessary maintenance; providing support for education from kindergarten through high-school graduation. It would be certainly required of public debate to determine financing. Each state will have to make its own cost and benefits analysis.

The late Frank Notestein (1950:340) wrote in half century ago: “The greatest danger, it seems to me, is that concern about slowing growth may drive societies to a renewed emphasis on the obligations of the individual to reproduce for the benefit of the sate, church, party or other extra-personal unit. There is a danger that the emotional reaction to slowing growth will lead us to seek people for society, rather than to enrich society for people.”


Reference:


Alexander, Richard D. 1988. “Evolutionary approaches to human behaviou: what does the future hold?” in Human Reproduction Behaviour: A Darwinian Perspective. Eds, Laura Betzig et al. Cambridge. England. Cambridge University Press. Pp317-341.

Becker, Gary S. 1991. A treatise on family. Cambridge, MA: Harvard University Press.

Notestein, Frank W. 1950 “The population of the world in the year 2000” Journal of the American Statistical Association 45(251):333-345.

Westoff, Charles F. 1991. “The return to replacement fertility: A magnetic force?” In Future Demographic Trend in Europe and North America. Ed Wolfgang Lutz. New York. The Academic Press. Pp 227-234