Warren C. Robinson’s paper, “The Economic Theory of Fertility Over Three Decades” analyzes and critics the economic model that has been used to explain fertility and in family planning for the last 15 to 20 years. The economic approach became popular in the 1970s and attempts to explain why fertility decreases as income increases.
Becker proposed a demand model where parents demand the services of children. This demand theory treated children as a capital good. The notions of quantity and quality of children were central to the economic model; the concept of child quality implies that parents have a demand for child-services as opposed to children and demand for child-quality is elastic to income. Thus fertility declines as the demand for higher quality children increases with increased income.
Robinson critiques this economic theory and covers a series of problems that cause the theory to be too simplistic and incomplete. The first of these problems is that producing children is implicitly linked to the physical pleasure gained from the process. Thus one may see higher fertility due not necessarily to a demand for child-services, but due to a high demand for the physical pleasure of sexual intercourse of which children are a by-product. Thus the demand function one sees with respects to fertility may be skewed because of the jointness of demand for child-services and physical pleasure.
The author describes three types of utility parents may gain from having children. The issue that arises with respect to this is that not all parents implicitly expect all three types of utility to arise from bearing children. In addition, issues of gender equity arise; in many cultures, for different reasons, male children have higher utility then female children. These factors cause the demand function to be deficient.
The third problem raised by Robinson is that substitutes exist for the services children provide and thus very wealthy persons could plausibly go through life without bearing children. Children are unique as couples that cannot obtain competing assets (those goods that can be substitutes for children – for example, wage-labor markets can substitute for labor-services provided by children) can still have children. Therefore, children are an “inferior good” in that households with high levels of income allow competing assets to become available. In addition to the above problems with the economic theory as originally presented, the demand theory fails to account for the risk factor associated with children.
A fifth problem with the economic theory is that the shape of a supply curve for child-services is very unclear. Describing a supply curve for child-services is difficult to conceptualize because a market for children exists where excess demand (by couples who cannot bear children for example) is accommodated by excess supply. The only supply curve for child-services describe to date is not a true supply curve as price and quantity do not appear in the description!
Robinson describes a sixth problem with the model related to how Leibenstein originally described the costs associated with obtaining child-services. The seventh, and last, problem he raises is the cost of not having children. Using contraception, having and abortion, etc. is a negative service unlike most that are positive. Thus low demand for contraception causes high apparent demand for child-services though the utility of having a child may be low; however the disutility of using/obtaining contraception is higher so one sees falsely elevated demand for children.
These problems show that the original economic theory of fertility have many policy implications. Thus current thought that policies encouraging birth control measures will be ineffective in decreasing fertility are not necessarily accurate. The economic theory as currently understood may not allow for a full understanding of fertility issues because of several short-sighted assumptions; however, the possibility of using a revised version of the model to understand the fertility-decision process exists.