Studies of less-developed countries have shown that higher levels of health and nutrition are accompanied by lower fertility. It is clear that behavioral factors rather than biological factors determine this outcome. The authors develop a model that emphasizes the rationality of observed behavior and points to changes in economic incentives regarding health care and nutrition as the means to altering behavior. If the model is correct, technical assistance on storing and cooking food may not succeed; likewise, instruction in children's nutritional needs. The solution is to introduce changes in the environment in which allocative decisions are made, such as job opportunities, better schools and agricultural technologies that substitute for human labor and require intelligence and schooling. Such changes create disequilibria by placing a premium on intelligence and schooling and, thereby, on investments in childhood nutrition. Finding the points of effective intervention and understanding the determinants of parents' demand for health and nutrition for children is the key. 28 pp. Ref.