Abstract
In this paper a two-period model is presented which attempts to predict the subjectively optimal fertility response of peasant households to parametric changes resulting from rural development projects and other policies. The seven parameters considered are: the relative price of agricultural capital, the off-farm wage, the responsiveness of out-migration to economic incentives, the discount rate and changes in techniques of production which fall into three categories: neutral, labor-augmenting or capital-augmenting. Some extensions of the model under different out-migration assumptions, endogenous marriage decisions and a “pension motive” for childbearing are considered. Some general policy prescriptions are then made. Less-developed country governments should set a high priority on limiting rural population growth. This could be achieved in part by controling the price of agricultural capital and by subsidizing appropriate changes in techniques of production, the appropriate changes varying by types of crops.
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