Three Essays On The Quantity-Quality Model Of Fertility For India: Theoretical Extensions And Empirical Testing

Open Access
Author:
Sen, Shonel
Graduate Program:
Agricultural Economics and Demography
Degree:
Doctor of Philosophy
Document Type:
Dissertation
Date of Defense:
July 25, 2013
Committee Members:
  • David Gerard Abler, Dissertation Advisor/Co-Advisor
  • David Gerard Abler, Committee Chair/Co-Chair
  • Spiro E Stefanou, Committee Member
  • Stephan J Goetz, Committee Member
  • Leif Jensen, Special Member
Keywords:
  • fertility
  • quantity-quality tradeoff
  • OLG model
  • TFR
  • Indian demography
Abstract:
The Quantity-Quality (Q-Q) model of fertility looks at a household’s choice of number of children, which is not made in isolation but rather is related to several other factors. The premise of the tradeoff is that parents with healthier, better educated children face less uncertainty about the child’s survival probability and success as an adult; hence they are satisfied with lower levels of childbearing which leads to smaller family sizes. The first essay of my dissertation, “Managing Above Replacement Fertility: Simulating Incentives To Trigger The Quantity-Quality Tradeoff” applies the Quantity-Quality model to speed up the demographic transition and investigates incentives for curbing high fertility behavior in developing nations to ease the burden of a rapidly growing population. This static model contributes to the existing research by actually testing the Q-Q hypothesis for various well-known functional forms, such as the Cobb Douglas function, the Leontief function and the Stone Geary function. Using simulations with data from India, I estimate the income and price elasticities for the different forms of household utility to demonstrate the change in fertility and schooling. I also run comparative static exercises to analyze the outcome of policy experiments and test the hypothesis that policy initiatives may not always yield anticipated results; one of the key findings is that simply subsidizing qualitative improvements in children (reducing cost of education alone without other investments in family planning etc.) may be insufficient to trigger the Q-Q tradeoff to curtail above replacement TFR. Reduction in parent’s out-of-pocket childcare costs to increase quality may prompt greater childbearing as children are now cheaper to raise. The second essay, “Model Of Childbearing With 2-Sided Altruism: A Calibration Exercise For Developing Countries” incorporates child labor and old age security into the dynamic Quantity-Quality framework of fertility, as revenue earned from children and lack of social safety nets for the elderly are important determinants of fertility behavior. The study extends earlier economic modeling to 3 time periods and 3 generations with bi-directional gifts and bequests and develops a OLG structural model with dynastic households to examine how inter-generational altruism affects the individual decision maker’s choice of fertility and educational investment in their children. I calibrate the parameters to solve for the household decision variables after tracing the consumption, fertility, transfers to elderly, schooling and child labor behavior from 1967 to 2007 and conduct comparative statics exercises to test different policy implements like conditional cash transfers, mid-day meal schemes and fertility reduction subsidies. Empirical estimation results using incidence of child labor as well as old age dependency on monetary transfers from one’s children suggest that increasing child quality may in the long run reduce the demand for quantity as income-earning potential and the probability of survival to adulthood for children increases, this in turn will offset the parent’s propensity to have greater number of children to recompense for future uncertainty. The third essay of the dissertation is entitled “Raising Quality May Reduce Quantity: Testing The Tradeoff With Evidence From India”. India is the second most populous country in the world and is currently undergoing its demographic transition with the average number of children per woman gradually declining. However the birth rate is still above replacement level and the current study uses an extension of the traditional Quantity-Quality model of fertility to understand childbearing behavior in the subcontinent. Earlier empirical studies on the Q-Q tradeoff just explore how greater number of children is usually associated with lower levels of child quality but this econometric analysis examines the reverse direction of causality using the nationally representative Demographic Health Survey (NFHS-3) for 2005-06. With number of children ever born as an indicator of fertility preference, I use ordered responses to examine the most important predictors of the target variable and find that parental quality is one of the crucial determinants of child quantity within a household. This indicates that greater investment in quality for a certain generation affects their childbearing choices once they become parental decision makers, so the Q-Q hypothesis can be augmented beyond a single generational perspective that in the long run may lead to smaller family sizes. My dissertation research provides a significant contribution to the field of economic and demographic study of fertility behavior. I conduct a static analysis, a dynamic modeling exercise as well as an empirical testing of the Quantity-Quality model with regards to childbearing and the policy implications from the findings will hopefully help motivate further work in this area.