The uncertain lifetime and the timing of human capital investment

I examine the effects of mortality decline on fertility and human capital investment decision of parents taking into account the uncertainty about child survival. I propose a model, where parents decide on their fertility before the uncertainty is realized, but they choose to invest only in human capital of their surviving children. The model implies a positive relationship between mortality and fertility and a negative one between mortality and educational investment. It has been argued elsewhere that as, in reality, most of the mortality decline occurred in infancy, it should not affect the human capital investment decision, which comes later in life. Thus, increased survival chances should not promote growth by raising the human capital investment. This paper argues the contrary and proposes a mechanism where mortality decline at any age before the teen years can promote growth by raising human capital investment regardless of the timing of the educational investment.      

Child mortality and fertility decline: Does the Barro-Becker model fit the facts?

I compare the predictions of three variants of the altruistic parent model of Barro and Becker for the relationship between child mortality and fertility. In the baseline model fertility choice is continuous, and there is no uncertainty over the number of surviving children. The baseline model is contrasted to an extension with discrete fertility choice and stochastic mortality and a setup with sequential fertility choice. The quantitative predictions of the models are remarkably similar. While in each model the total fertility rate falls as child mortality declines, the number of surviving children increases. The results suggest that factors other than declining infant and child mortality are responsible for the large decline in net reproduction rates observed in industrialized countries over the last century. Financial support by the National Science Foundation (grant SES-0217051) and the UCLA Academic Senate is gratefully acknowledged. I thank Sebnem Kalemli-Oczan, Rodrigo Soares, and two anonymous referees for comments that helped to substantially improve the paper. Olesya Baker and Ilya Berger provided excellent research assistance. Responsible editor: Junsen Zhang.     

Trends in child support outcomes

This paper examines trends in child support award rates, award amounts, and receipts, We investigate four hypotheses that have been proposed to explain the downward trend in these outcomes during the 1980s: (1) changes in the demographic composition of the population eligible for child support, (2) increases in mothers/ income, (3) decreases in fathers’ income, and (4) inflation. Our results indicate that trends in nonmarital fertility can explain much of the decline in award rates. The steady downward trend in fathers’ incomes during the 1980s also explains a considerable portion of the decline in award rates, award amounts, and receipts. Our results are also consistent with the notion that persistent money illusion is responsible for the decline in real child support awards.     

A theoretical framework of collective action for the evaluation of family planning programs

Typically, a family planning program seeks to alter individuals' fertility behavior. The very necessity for the existence of a family planning program presumes that individuals' fertility expectations and behavior are not yet consistent with the objectives of the program. Therefore, some individuals may choose not to cooperate. In this article I establish a theoretical framework for the evaluation of family planning programs by synthesizing the literature on the theory of collective action. Because of the characteristics of collective action — indivisibility and externality — noncooperation (free riding) is bound to occur. Faced with the problem of free riding, a good family planning program should ideally apply selective incentives, localize the costs and benefits, and invest in social capital. The relations among these three factors, cooperation, and fertility are also spelled out.An earlier version of this article was presented at the annual meeting of the American Sociological Association, Washington, DC, 11–15 August 1990.     

Children as insurance

This paper presents a dynamic model of fertility decisions in which children serve as an incomplete insurance good. The model incorporates uncertainty about future income and the survival of children as well as a discrete representation of the number of children. It contributes to the understanding of the negative relation between fertility and education, shows why parents may demand children even if the return is negative, and explains why fertility might rise with increasing income when income is low and decrease when income is high. Furthermore, the model can account for the decline in fertility when the risk of infant and child mortality decreases. Finally, the implications for empirical tests of the demand for children are also examined. Received: 8 September 1998/Accepted: 9 June 1999     

Some macroeconomic aspects of global population aging

Across the demographic transition, declining mortality followed by declining fertility produces decades of rising support ratios as child dependency falls. These improving support ratios raise per capita consumption, other things equal, but eventually deteriorate as the population ages. Population aging and the forces leading to it can produce not only frightening declines in support ratios but also very substantial increases in productivity and per capita income by raising investment in physical and human capital. Longer life, lower fertility, and population aging all raise the demand for wealth needed to provide for old-age consumption. This leads to increased capital per worker even as aggregate saving rates fall. However, capital per worker may not rise if the increased demand for wealth is satisfied by increased familial or public pension transfers to the elderly. Thus, institutions and policies matter for the consequences of population aging. The accumulation of human capital also varies across the transition. Lower fertility and mortality are associated with higher human capital investment per child, also raising labor productivity. Together, the positive changes due to human and physical capital accumulation will likely outweigh the problems of declining support ratios. We draw on estimates and analyses from the National Transfer Accounts project to illustrate and quantify these points.     

Sub-Saharan Africa: population pressures on development

The population of sub-Saharan Africa, estimated at 434 million in 1984, is expected to reach 1.4 billion by 2025. The birth rate, currently 48/1000 population, continues to increase, and the death rate, 17/1000, is declining. Rapid population growth has curtailed government efforts to provide adequate nutrition, preserve the land base essential for future development, meet the demand for jobs, education, and health services, and address overcrowding in urban areas. Low education, rural residence, and low incomes are key contributors to the area's high fertility. Other factors include women's restricted roles, early age at marriage, a need for children as a source of security and support in old age, and limited knowledge of and access to modern methods of contraception. Average desired family size, which is higher than actual family size in most countries, is 6-9 children. Although government leaders have expressed ambivalence toward development of population policies and family planning programs as a result of the identification of such programs with Western aid donors, the policy climat is gradually changing. By mid-1984, at least 13 of the 42 countries in the region had indicated that they consider current fertility rates too high and support government and/or private family planning programs to reduce fertility. In addition, 26 countries in the region provide some government family planning services, usually integrated with maternal and child health programs. However, 10 countries in the region do not support family planning services for any reason. Unfortunately, sub-Saharan Africa has not yet produced a family planning program with a measurable effect on fertility that could serve as a model for other countries in the region. Social and economic change is central to any hope of fertility reduction in sub-Saharan Africa. Lower infant and child mortality rates, rising incomes, higher education, greater economic and social opportunities for women, and increased security would provide a climate more conducive to fertility decline. Given the limited demand, great sensitivity must be shown in implementing family planning programs.     

An Evolutionary Interpretation of Fertility Decline: New Evidence

This article presents new evidence that partly reinforces and partly qualifies the results of a recent article on fertility decline published in this journal by Sanderson and Dubrow. Eight panel regression analyses were carried out, four for the period between 1960 and 1990 and four more for the period of the original demographic transition, that between 1880 and 1940. The analyses for the 1960–1990 period show that Sanderson and Dubrow's original conclusion that infant mortality decline was causing fertility decline (rather than the reverse) was correct. On the other hand, Sanderson and Dubrow's conclusion that enhanced female empowerment led to fertility decline proved incorrect. The new analyses reported here show that the reverse was in fact the case: women became more empowered as a result of declining fertility. The panel analyses carried out for the 1880–1940 period showed that infant mortality decline seemed to be an important cause of fertility decline between 1880 and 1910 but not between 1910 and 1940. However, the reverse hypothesis—that fertility decline caused infant mortality decline during this period—was falsified. I conclude that the causes of fertility decline in the modern world may be different, at least to some extent, from those in the original demographic transition. This is an unsatisfying (because unparsimonious) result that suggests the need for more research.     

Family and school capital explaining regional variation in math and reading achievement

We know that inequality varies by region and also begins early in life. Bivariate data suggest that 5–14-year-old children in the 1994 National Longitudinal Survey of Youth (NLSY) score differently in reading and mathematics achievement depending on their region, with children in the South and West scoring lower. We combine literatures on regional bases of inequality and family and school capital to generate hypotheses explaining these differences. Analyses of covariance provide supportive evidence. For both outcomes among boys, the variation is explained by additive models including family and child social and human capital, although selected aspects of school capital are also influential; these models also explain math achievement among girls. A model including both additive and interactive effects explains regional differences in reading achievement for girls. We interpret these findings in terms of their implications for studying inequality in child achievement as well as for emphasizing the importance of regional inequality, particularly beyond the South versus non-South distinction.     

Child mortality and fertility: public vs private education

How does the effect of child mortality reductions on fertility and education vary across educational systems? To answer this question, we develop an overlapping-generations model where altruistic parents care about both the number and human capital of their surviving children. We find that, under a private education system, if income is low initially, the economy converges to a Malthusian stagnation steady state. For a high level of initial income, the economy reaches a growth path in which children’s education rises and fertility decreases with income. In the growth regime under private education, exogenous shocks that lower child mortality are detrimental for growth: fertility increases and education declines. In contrast, under a public education system, the stagnation steady state does not exist, and health improvement shocks are no longer detrimental for growth. We therefore offer a new rationale for the introduction of public education.     

How female education affects reproductive behavior in urban Pakistan

Although Pakistan remains in a pretransitional stage (contraceptive prevalence of only 11.9% among married women in 1992), urban women with post-primary levels of education are spearheading the gradual move toward fertility transition. Data collected in the city of Karachi in 1987 were used to determine whether the inverse association between fertility and female education is attributable to child supply variables, demand factors, or fertility regulation costs. Karachi, with its high concentration of women with secondary educations employed in professional occupations, has a contraceptive prevalence rate of 31%. Among women married for less than 20 years, a 10-year increment in education predicts that a woman will average two-fifths of a child less than other women in the previous 5 years. Regression analysis identified 4 significant intervening variables in the education-fertility relationship: marriage duration, net family income, formal sector employment, and age at first marriage. Education appears to affect fertility because it promotes a later age at marriage and thus reduces life-time exposure to the risk of childbearing, induces women to marry men with higher incomes (a phenomenon that either reduces the cost of fertility regulation or the demand for children), leads women to become employed in the formal sector (leading to a reduction in the demand for children), and has other unspecified effects on women's values or opportunities that are captured by their birth cohort. When these intervening variables are held constant, women's attitude toward family planning loses its impact on fertility, as do women's domestic autonomy and their expectations of self-support in old age. These findings lend support to increased investments in female education in urban Pakistan as a means of limiting the childbearing of married women. Although it is not clear if investment in female education would have the same effect in rural Pakistan, such action is important from a human and economic development perspective.     

Motivational and nonmotivational determinants of child-number desires

The number of children desired by individuals—often referred to as family size desires or preferences—is a central construct in much research designed to understand and predict fertility. It is often used as a proxy for the construct of childbearing motivation. This paper presents a theoretical framework that organizes and elucidates the relationship between these two constructs. That relationship is examined using a reliable, valid measure of childbearing motivation and data from 195 husbands and 196 wives with no children and 196 husbands and 196 wives with one child. The results indicate that childbearing motivation has a complex relationship with child-number desires, characterized by curvilinearity and a failure to distinguish among those desiring more than two children. We discuss the implications of this pattern.     

Modern sector enlargement or traditional sector enrichment?

This paper considers how GNP would change if development resources are allocated in alternative ways, taking account of induced migration. The preferred allocation of development resources between sectors is shown to depend on the amounts of modern sector enlargement and traditional sector enrichment that could be achieved under alternative resource allocations and the labor market effects of each.The practical significance of these results is the following. Using additional development resources to expand modern sector exports and employment is most efficacious when the marginal product of capital in the modern sector is high and the amounts of induced migration and employment low. In other circumstances — namely, when the marginal product of capital is higher in the traditional sector than in the modern sector and search unemployment widespread — allocating the development fund for purposes of traditional sector enrichment might be better.     

Economic blessings seen in Z.P.G

According to S.F. Singer and Bradley W. Perry in their study published by the Joint Economic Committee of Congress, the U.S. and its individual workers will be better off economically if population growth is reduced to zero. Making use of a computer, the researchers tested 3 fertility rates in mathematical models simulating the U.S. economy, population, and resources. They found that decreased childbearing would lead eventually to a smaller overall Gross National Product, but the share of economic welfare per person would increase. Lower fertility would have the following advantages according to Singer and Perry: 1) reduced requirements for business investment to keep up with an expanding labor force; 2) reduced depletion of and demand for the finite amounts of natural resources, resulting in lower costs and less need for marginal resources; 3) smaller expenditures for pollution control and less degradation of the environment; 4) a higher proportion of Americans in the usual working ages; and 5) smaller expenditures therefore, for schooling and child care, but without significantly increased medical expenditures for the elderly. The lower fertility option tested by computer was a completed fertility rate of 1.7 children/woman, along with net immigration of 400,000. This option would lead to an end of population growth in 50 years.     

Land cover change and fertility in West-Central Africa: rural livelihoods and the vicious circle model

The vicious circle argument, rooted in a neo-Malthusian tradition, states that resource scarcity increases the demand for child labor and leads to higher fertility. The rural livelihood framework, on the other hand, contends that households employ multiple strategies, only one of which involves adjusting their fertility levels as a response to environmental pressures. This study provides a unique test of both theories by examining the relationship between land cover change and fertility across hundreds of rural communities in four West-Central African countries. The findings reveal a complex relationship between natural capital and fertility. In communities where natural capital was initially low, a further decline in that capital is associated with both higher fertility preferences and levels. However, we find that fertility preferences and behavior are often discordant, with notable within-community differences in response to decline in natural capital across levels of household wealth.     

Family and economic growth: A review

The interplay between fertility decisions and per capita growth of income by investment decisions in human capital constitutes the key element of growth models based on the microeconomic theory of family behavior. A strategy that raises the fixed cost per child, reduces the cost of education, stimulates the accumulation of human capital, diminishes the opportunity cost of parents to send their children to school, encourages female activity, accelerates economic development and contributes to a reduction of inequality.     

Role of the social and cultural factors in human fertility in India

During the 1940s and 1950s in India, a relatively low level of fertility of 6–8 children per woman of unbroken marriage is implicated by the social and cultural factors; the fertility was probably depressed by 15–20 percent. An appraisal of the trends over the last 2–3 decades of the pertinent variables—age at marriage (an early and almost universal marriage); the widow remarriage rates; the induced abortion rate; postpartum infecundability (breastfeeding) and postpartum abstinence; the son preference; and the other sexual attitudes and taboos—suggests that during the late 1970s and early 1980s, the fertility enhancing and retarding forces were offsetting each other. But, over the next two decades, the variables responsible for enhancing the fertility level will play a more dominant role than the corresponding fertility-reducing factors. However, the role of induced abortion remains somewhat unclear. For any significant reductions in the national crude birth rate in India during the 1990s, the family planning efforts will have to be considerably accelerated.     

Books and publications received

Efforts to control rampant population growth in sub-Saharan Africa have been stymied by confusion between the potential causes and consequences of high fertility in the region. A controversy has surfaced over the causal direction of the fundamental relationship between human fertility and size of landholdings. Members of one school of thought claim that farm couples modify their fertility behaviour according to the amount of land they own or operate. Yet others argue that the size of landholdings varies as a function of family size (an indicator of the availability of family labour). In the present study we use a two-stage least-squares regression on data from a 1988 survey of 747 farm households in Rwanda to disaggregate and compare the strengths of these two possible paths of influence. The results show that landholdings exert a positive influence on human reproduction, but not the reverse. Moreover, this influence is slightly stronger for couples who own all the land they operated, probably because they have larger incomes from equity in the land. The size of the farm is unrelated to the size of the family's potential farm labour force (measured as the number of household members aged 15–65) or to the husband's total desired number of children. These findings suggest that farm size boosts the number of living children not by creating a demand for more children but by increasing the supply of children through higher natural fertility and child survival.     

Child schooling and contraceptive use in rural Africa: A Ghanaian case study

In this study, I examine the contributions of childrens schooling to fertility decline in Africa. I use cross-sectional data collected in the late 1980s to look at how household child schooling patterns and community access to schools affect contraceptive use among rural Ghanaian women. My results indicate that the schooling of children is associated very strongly with increased use of modern and traditional contraceptive use and thereby suggest that educational policy has played a role in initiating and sustaining fertility decline in Ghana and possibly elsewhere in Africa.     

Endogenous fertility and human capital in a Schumpeterian growth model

This study develops a scale-invariant Schumpeterian growth model with endogenous fertility and human capital accumulation. The model features two engines of long-run economic growth: R&D-based innovation and human capital accumulation. One novelty of this study is endogenous fertility, which negatively affects the growth rate of human capital. Given this growth-theoretic framework, we characterize the dynamics of the model and derive comparative statics of the equilibrium growth rates with respect to structural parameters. As for policy implications, we analyze how patent policy affects economic growth through technological progress, human capital accumulation, and endogenous fertility. In summary, we find that strengthening patent protection has (a) a positive effect on technological progress, (b) a negative effect on human capital accumulation through a higher rate of fertility, and (c) an ambiguous overall effect on economic growth.