Demand for Children
Rami E. Cremesti
50796934
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
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,
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
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,
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.
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
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.
References
Abernethy,
V. D. (1997). Allowing fertility decline: 200 years after Malthus’s
essay on population. Environmental
Law, 27(4), 1097-1109.
Alexander, J. C. (1988). Action and Its environments: Toward
a new synthesis. New York: Columbia University Press.
Becker, G. S. (1991). A treatise on the family (Elg.
Ed). Cambridge: Harvard University Press.
Blaug, M. (1978). Economic Theory in Retrospect. Homewood:
Richard D. Irwin, Inc.
Eberstadt, N. (1997). The population Implosion. The Public
Interest, 129, 3-23.
Friedman, D., Hechter, M., Kanazawa,
S. (1994). A Theory of the Value of Children. Demography, 31(3), 375-394.
Malthus, T. R. (1798). An Essay on the Principle of Population.
New York: Penguin Books.