Demand for Children
Rami E. Cremesti
University of California, Irvine
Econ 155W, Dr. V. Wright/Dr. H. P. Bowen
In his book “Demand for “Children(1991), Becker argues that the interaction between the quantity and quality of children is the most important factor behind the changing fertility rates in the US. Furthermore, he also uses the price of children and real income to explain the high demand for children. In the light of this hypothesis, Becker examines some major social phenomena related to fertility and the factors affecting these phenomena: higher rural fertility rates compared to urban communities, the effect of governmental programs on the demand for children, the reduction of female fertility observed with the rise in women’s wage, and the low fertility rates observed in rich families. The theories of other authors are presented for comparison and contrast. These authors are: Friedman, Doodoo, Alexander, Malthus, Eberstadt, Ebernethy and Blaug.
Becker(1991) gives evidence that farm families have been larger than urban families because children performing household chores or working in the family business reduces the net cost of children. He believes that farm families have had more children mainly because children have been more productive on farms than in cities. He gives another example of children in rural India and Brazil where children as young as five or six years of age begin to contribute to farm work and by age twelve contributions are very large.
Another factor that affects fertility rates - in a positive way this time - is Government programs providing aid to mothers. These programs eased the budget constraint of the household and reduced the cost of children(Becker, 1991). When mothers have more money to spend on their children, the number of children increases. The catch in this situation is that the number of mothers participating in the labor force decreases. Therefore, these programs encourage families to have more children by reducing the opportunity cost of time spent on children.
Becker goes on to examine the “wife’s time” factor affecting fertility rates to corroborate his economic quantity/quality thesis. He asserts that the decision on how many children a family wants to have strongly depends on the value of time of wives, because the cost of a wife’s time is a major part of the total cost of producing and rearing children(Becker,1991). When families have more children, women participate in household work rather than contribute to the work-force of the nation’s markets. Becker(1991) suggests the growth in the earning power of women during the last hundred years in industrial countries was the major factor that encouraged women to join the work-force rather than stay at home and rear their children.
Improvement of new birth control techniques in the past 150 years accompanied by an increase of age at marriage, Becker(1991) believes, are not a major cause of declining fertility rates. He proves this by giving an example of European families who kept very High fertility rates with more effective birth control methods. Likewise, Greek and Romans kept very small fertility levels even without the availability of modern methods of birth control. They just did not have sex very often or practiced non-reproductive modes of sex(Becker - 1991).
While Becker(1991) believes the price of
children has greatly affected the demand for children, he goes on and expands
his ideas by studying the relationship between real income and the demand for
children. Increases in real income generally increase the demand for children,
he observes. Becker supports this by the example of wealthier families that
have more children than poor ones in polygamous societies. Likewise, wealthier
families have more children in monogamous societies.
Most of all, Becker(1991) believes that the interaction between the quantity and quality of children is the most important factor determining the demand for children. To explain this, Becker asserts that the effective price of children rises with income, and vice versa. When families choose to give their children an upbringing of lesser
quality, that lowers the shadow price of quantity because it depends on quality. Becker(1991) believes that this raises the total shadow price of quality and lowers quality further. This in turn lowers shadow price of quantity and raises quantity still further, and so on. Therefore this relationship explains that a decrease in quantity lowers the shadow price of quality which encourages a trend away from quantity and more toward quality upbringing of children. Furthermore, it explains that the education of children, for instance, depends closely on the number of children.
Further empirical implications show a negative relationship between quality and quantity (Becker, 1991). Becker(1991) gives the example of low investment in education, health, and other skill-training for blacks due to a low rate of return for blacks relative to whites. This implies that the high fertility rate of blacks comes in response to low investment opportunities, which is a negative relation between quantity and quality.
From another economic point of view, Becker proposes that fertility rates are affected by the size of return on investment in the education of children (Becker, 1991). According to Becker(1991), rise in income, by itself, could reduce fertility with interaction of quality. Higher rates of return on quality could reduce fertility further more. Thus, economic development negatively affects fertility even when real income elasticity of demand for fertility is positive. Similarly, this implies differences in rates of return to different families in industrialized countries where richer families have fewer children than poorer families. The opposite is true though in less industrialized countries where richer families have more children than poorer families.
Becker’s theory on the economic factors behind fertility rates is by no means original. Malthus, as far back as 1798, made a number of suppositions about the factors that might be influencing birth rates. He held the view that agricultural productivity and birth rates are interrelated (Malthus 1798). Subsequently refined and debated, the classical theory of population was summarized by Blaug(1978) as the proposition that the production of children is an investment that carries the prospect of future return. Children are not, he argues, like consumer goods, items that you buy. They are an investment. (Blaug 1978 p.78).
In contrast to Blaug’s theory, Becker views children as a mere consuming force and he’s far from viewing them as a good investment . Undoubtedly, in most social classes in industrialized countries, the “consumption view” of children is the more suitable and powerful explanation. However in poverty-stricken social sectors, various public cash and in-kind transfers create a series of economic incentives which make the childbearing decision equivalent to the Malthusian analysis that children can be income producing and useful at times.
Currently, fertility rates are declining or are already low in most industrialized countries. Eberstadt(1997) observed that the economic opportunity model holds that a sense of “environmental and economic limits” motivates couples to prefer and plan small families. The positive, motivational role for perceived limits may contribute to world-wide improvement in the standard of living. In the
Demographic Transition Theory(DTT), Abernethy(1997) tells policy makers that economic development, low infant mortality, and education cause a preference for small family size.
Abernethy(1997) proposes a different and much simpler explanation of family size preferences. The premise is that children are desirable among all peoples. It is no large
leap to the hypothesis that families ordinarily want as many children as they believe they can successfully raise. Like Abernethy, Becker(1991) believes the literature on fertility has concentrated on the interplay between the two factors of quantity and quality.
Unlike Becker(1991) though, Alexander(1988) has a different view on the demand for children. According to him, supportive relationships with natal kin have a lot of influence on fertility preferences and behavior. The issue of relating context and strategic behavior, or “macro-micro linkages”, is a consistent concern to Alexander(1988). He examines relationships among women’s native kin ties (their nostalgia for their home towns/countries), their demand for children, and their fertility limitation behavior. Alexander(1988) suggests good reasons to expect that these individual-level mechanisms depend on the social and cultural context within which they occur.
Alexander(1988) pursued analyses which derive from the literature on women’s social standing through natal kin ties and the implications of these ties for fertility. His approach and results highlight the importance of forming expectations within an explicit theory of culture and strategic action. In doing so, his study contributes to a
greater specification of hypotheses in social demography, while illustrating the value of Alexander’s (1998) sketch of the relationship between context and individual behavior.
To support his hypothesis, Alexander uses the example of Sangila and Timling (in the Himalayas). Even though both cities are inhabited by members of a single ethnic group, they display disparate patterns in the relationship between measures of natal kin ties and women’s desire for more children(Alexander,1988). Timling differs from Sangila in its greater reliance on subsistence agriculture, greater distance from the urban infrastructures of the Katmandu Valley, and consequent homogeneity with respect to potential economic partners. In this remote setting, Alexander(1988) sees that indications of strong natal kin ties at the individual level are associated with a greater desire for additional children. Conversely, in Sangila, Alexander found that strong ties to the natal family dramatically reduce couples’ demand for children and increase the likelihood of contraceptive.
Alexander(1988) argues that cultures stressing strong ties between families and family members, is what encourages those cultures to invest in unlimited childbearing versus choosing to have families with a moderate number of children. The Tamang for example strengthen family ties by encouraging cousin-to-cousin marriages. In Timling (home of the Tamang), natal kin participate in all family efforts and this reduces considerably the cost of bearing children and economically benefits the family. The explanation of the increased fertility rates in those cultures is simple: women benefit from their close natal relatives and are thus encouraged to have additional children to increase these kinship ties in the next generation. In contrast, in Sangila, the family organization of activities is declining.
Women can count only on natal kin with strong ties to them for support. Also, the appearance of wage labor economy dramatically increases the cost of rearing children.
When Becker(1991) discusses the issue of the demand of children on real income of families, he points out that wealthier men tend to have more children in polygamous societies, because they are far more likely to be polygamous than poor men. Likewise, Doodoo(1998) relates polygamy to the reproductive decision made by men in polygamous societies. However, Doodoo goes on further and explores the intricacies of the relationship between marriage type and reproductive decision-making by examining the extent to which the relative fertility preferences of women and men are translated into contraceptive use.
According to Doodoo(1998), polygamous marriages are typically more common in rural areas and occur among the less educated, like in sub-Saharan Africa. In Africa, a bridegroom pays to the family of his intended wife to compensate her family’s loss of her reproductive and
productive services, and accompanying this payment also, is the transfer of decision-making power to the man. Presumably, polygamy is more likely to be observed in societies where the relations between the sexes are of a “patriarchal” type, ie, marked by supremacy of the father. Men in polygamous unions can more easily transfer the costs of child bearing and rearing to women because they have the privilege of decision-making. The male’s advantage is a greater ability to translate preferences into behavior. In other words, if men thus incur lower relative costs of childbearing and have the upper hand in decision making, it is reasonable to expect males to resort less to contraceptive use.
On the other hand, Frieman(1994) uses a nonstandard value assumption, “uncertainty reduction”, to develop a rational explanation of contemporary fertility behavior in developed societies. The term “non-standard value” refers to the fact that the reduction of uncertainty in one’s life is an uncommonly sought value as such (personal note).
According to Becker(1991), children are a durable item and provide nonspecific needs for the parents, but, unlike
refrigerators or automobiles, children are time-intensive. In view of this point, the cost of having children is affected crucially by the value of parents’ time. The value of time increases as the parent’s wage rises. Once this view is taken into consideration, the implication of Becker’s proposition can be easily derived: If children are more time-intensive than the average consumption commodity, and if the real value of human time increases with upward shifts in wage, then the price of children will increase in relation to other goods. The parents’ budget, which includes both time and goods, will now urge them to substitute children with cheaper goods. Further, if child care is more intensive in the mother’s time than in the father’s, and if the value of the mother’s time increases in relation to the value of father’s time, then the price of children will go up and fewer children will be sought.
Friedman(1994), unlike Becker (1991) explained by instrumental values what a large body of behavior does not seem to be explicable in other terms. Freidman aims to supplement rational choice theories of fertility by proposing a non-instrumental motive for the decision to have children.
First, Friedman (1994) proposed, that the uncertainty reduction theory asserts that rational actors will always seek to reduce uncertainty. Secondly, the “marital solidarity enhancement” assumption that husbands
and wives will seek to increase solidarity in their
marriages. These two theories seek to explain the incremental fertility outcomes of those who control the childbearing decision.
Under Friedman’s (1994) first assumption, uncertainly leads to decision making without knowing the odds at stake in making the choices. Because people value peace of mind as an end in itself rather than merely as a means to various other ends, it is an inherent rather than an instrumental value (one valued for its end results not in itself - personal note). Most women and most couples choose to become parents voluntarily, and because parents can do a lot to control their children’s fate and to help each other, risks and uncertainties in life are more likely to be diminished in comparison with the types of uncertainty that individuals face on their own.
Friedman(1994) views marriage as another global strategy for reducing uncertainty, yet, ironically, the instability of marriages is yet another source of uncertainty. He thus introduces a subsequent assumption that joint decisions favoring parenthood are more likely to be made by married couples who have fewer alternative sources of enhancing the solidarity of their marriages. For some couples, parenthood enhances the dependence of each member of a marriage and thereby the overall solidarity of the marriage. Therefore, the way I see it, marriage is a means of uncertainly reduction both at the global and the individual level.
Friedman(1994) has considered in her essay the two strategies of incorporating immanent values; The survey strategy, she discredits and labels as delusive. She takes the side of the universality of the immanent value of uncertainty reduction and employs this assumption to explain the decision for or against parenthood. Together with the secondary assumption, namely marital solidarity enhancement, uncertainty reduction allows her to propose a theory of the value of children from which many different hypotheses may be deduced. This value does not concern parenthood per se; the outcomes of parenthood and of childlessness are not about children, but about people’s preferences for their own well-being(Friedman, 1994).
In this paper, I have compared and contrasted Becker’s economical theory explaining the disparate birth rates observed in different societies with the alternative (and sometimes similar) explanations of Friedman, Doodoo, Alexander, Malthus, Eberstadt, Ebernethy, and Blaug. Whereas Becker capitalizes on the economics behind having children (the “price” of children as he puts it), some of the other authors propose alternative explanations to explain birth rate trends. Alexander analyses natal kin relationships and their effect on birth rates in some societies. Doodoo uncovers how the “patriarchal” (characterized by the father’s supremacy) mentality in polygamous societies is a great motivation for having lots of children. Eberstadt is a proponent of the “environmental and economical limits” as the controlling factors behind fertility rates. Abernethy reminds us that economic development, low infant mortality and education cause a preference for small family sizes. Friedman defends “uncertainty reduction” as a major factor behind fertility rates. Her point is that adults get married and have more children to have more peace of mind and enjoy the solidarity of marriage. From these authors, we conclude that there are different cultural, technological, economical and psychological explanations for the different birth rate trends observed in modern day societies.
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