Children as by-products, investment goods and consumer goods: A Review of some micro-economic models of fertility

Four general models of family size are developed and utilized for classifying previous work on the micro-economic analysis of fertility, which describes four family decision-making situations.

Abstract

Summary This paper is a review of a number of applications of traditional micro-economics to the analysis of fertility. In this paper four general models of family size are developed and utilized for classifying previous work on the micro-economic analysis of fertility. The general models describe four family decision-making situations. The outcome of these decisions determines fertility either directly or indirectly. In the first model, parents are forced to choose between sexual activity and a higher standard of living. Children are the by-products of the amount of sexual activity chosen. In the second model, children are an investment good and family size is determined by the choice between current and future consumption. The third and fourth models depict situations in which children are considered to be desirable in themselves, that is, they are consumption goods.