The Value of Children: An Economic Perspective

Abstract

It is postulated that parents respond to economic considerations in the children they bear and rear and that they equate the sacrifices and services expected in arriving at the value of children to them. Advances in economic analysis which make this analysis of population growth possible include: the theory of investment in human capital the treatment of human time in allocative decisions the household production function and a view of the family that encompasses both consumer choice and household production decisions including the bearing and rearing of children. In poorer countries children are very much capital. They require a great deal of care in the beginning and the rewards are wholly psychic but as the child becomes a teen-ager the cost is less and the rewards in the form of useful work are great. The concept of time as a factor in household production and the idea of household production itself show that a child does indeed contribute value to a home even though he is not gainfully employed. Other studies in this supplement elaborate these concepts. At the present time the therory lumps all the costs of the children at the beginning of the cycle and all the rewards at the end. It is thought that the process is a continuing one with varying values at each stage of the reproductive life cycle. Economic tools have great potential in explaining various demographic patterns. To be truly effective models will have to be developed for each stage of family life including the time childrearing days are over. Only thus will family planning personnel be able to see what results increased economic opportunity for women increased labor-saving devices and changes in contraceptive technology as well as infant mortality will have on untimate family investment in children.