ECON C175 Chapter Notes - Chapter (Week 8): Utility, Human Capital
Week 8: Ho Do Eooists Thik We Deide
Ho May Childre to Hae?
Becker: The Demand for Children
• Moral restraint is the main check on excessive population growth
• Demand for children
o Each family maximizes a utility function of the quantity of children – with less children, the
ouple is ale to iest suffiietly ore i eduatio, traiig, ad attratieess of eah
child to increase their probability of survival to reproductive ages and survival thereafter
▪ Explains fertility in Western countries in the past centuries and developing countries
this century
▪ Childre are’t purhased, ut self-produced by a family using market goods and
time of the parents. Therefore, the total cost of producing and rearing children also
differs
o Demand for children depends on the relative price of children and income. As the price of
children increases reduces the demand for children and increases the demand of other
commodities (holding income constant)
o Farm families have more children because children are more productive on farms than in
cities
▪ However, contribution of farm children has declined as agriculture became more
mechanized. Because of this, rural fertility is now slightly less than urban fertility in
some countries (ie: more school and time spent in school due to commute and other
factors)
o Programs that give aid to mothers with dependent children has increased as the number of
children increases (with reduced cost of children) → more illegitimate births since mothers
without partners qualify
o Relative cost of children is affected by changes in the value of time of married women
eause a other’s tie is a ajor ost of produig ad rearig hildre. Father’s groth i
earig poer has’t sigifiatly affeted the ost of hildre (iest ore i arket skills
than household skills)
o Households prefer their own children rather than adopt because it reduces the uncertainty of
parents, who have more information about the genetic constitutions and early experiences of
their own children
▪ Parents are likely to put their inferior children up for sale or adoption than their
superior children
o Suspects that improvements in birth control methods are mainly an induced response to
other decrease in demand for children, rather than an important cause of decreased demand
▪ Reductions in fertility can be attributed also to delayed marriage, infanticide,
nonproductive modes of sex
o The demand for children is affected not only on the price of children, but by real income
• Interaction between quantity and quality
o A small exogenous increase in n (number of children) or q (quality of each child)
o Children as commodities are presumed to not have close substitutes
o Contraceptives alone cannot explain the large decline in births in the US – it is possible that
the explanation lies in the quantity and quality of children
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