An Economic Analysis of Quantity-Quality Substitution in Household Fertility Decisions.

by Dennis N. De Tray

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A theoretical economic model of the "production" of children and the tradeoff between quantity and quality as measured by schooling. The aim is to explore a body of demographic data hitherto ignored by economists. Some of the specific assumptions and equations, formulated in the context of a developing country (Puerto Rico), might not apply in the United States. Parents are assumed to control their production of children; if this is not true--if the real determining factor is the cost of not having children--then the central thesis has little applicability. Regression analyses were performed using the Nerlove-Schultz data from the 1950 and 1960 Census for Puerto Rico, and their index of demand for female labor (see RM-6322), although it seriously understates the value of rural women's time. Results agree with expectations. The 10-year time lag is supported in that coefficients using 1950 data are more consistent with expectations than those using 1960 data. 40 pp. Bibliog.

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