How Economic Opportunities and Family-Planning Programs Control Population Growth

by Paul Gertler, John W. Molyneaux

Research Brief

Burgeoning populations are among the constraints on the ability of developing nations to attain a higher standard of living. International economic-development organizations—some funded in large part by the United States—have been collaborating with governments in the developing world to establish effective programs for controlling population growth. But it has been unclear which approach would be more helpful—promoting family planning (e.g., through making contraceptives more readily available) or improving economic opportunities, especially those for women, thus increasing the cost of staying home and raising more children. A new RAND study conducted for the World Bank suggests that, for countries like Indonesia with a well-developed family-planning infrastructure, further investments are best directed toward improving women's educational and employment prospects. But the infrastructure is an important prerequisite.

The RAND study synthesizes two strains of research—demographic and economic—that have reached seemingly conflicting conclusions about the relative impact various factors can have on fertility. Demographers have identified three behavioral factors that affect fertility—contraceptive use, age at marriage, and breast-feeding decisions. Of these, they have found that increased contraceptive use is the most important behavioral means of reducing fertility, and from that they have inferred that a key role can be played by family-planning programs. Of course, such behavioral choices are influenced by factors other than government programs. Among these are education and economic opportunities. Economists have assessed the relative influence on fertility of such opportunities and of family planning programs and, unlike demographers, have found the former to be by far the most important.

The RAND study synthesizes these two approaches. Researchers Paul Gertler and Jack Molyneaux devised an analytic framework that integrates both demographic and economic approaches into a unified model. They apply the model to data from Indonesia for the years 1982 through 1987, a country and a period that make a particularly interesting case study for several reasons. First, Indonesia is a very populous country (fourth in the world). Second, in the early 1970s, Indonesia developed a flexible but comprehensive family-planning program that by 1980 had spread to all parts of the country through an organization frequently cited as a model of government-sponsored fertility control. Third, in the early 1980s the country underwent a substantial macroeconomic expansion stemming from an oil price boom and other factors. Finally, total fertility rates have fallen dramatically—by 22 percent during the 1970s and by another 23 percent in the first half of the 1980s.

Gertler and Molyneaux related changes in fertility to changes in behavioral choices (contraceptive use, age at marriage). They also related changes in behavioral choices to changes in women's education and wages, men's wages, and family-planning resources (e.g., number of clinics or field workers per capita), among other things. That they measured changes is an important feature of the study. Some researchers have found high levels of government activity where fertility rates are high, but their cross-sectional approaches have not permitted them to determine whether the high fertility rates had been caused by failed policy or were the targets of policy efforts.

The RAND researchers found that 75 percent of the dramatic fertility decline in Indonesia from 1982 to 1987 was attributable to a large rise in contraceptive use (as opposed to other choices, such as postponement of marriage). That rise in contraceptive use was motivated by certain external factors that affect demand. The researchers estimated that 87 percent of the increase in use was attributable to changes in educational and economic factors, while only 5 percent was attributable to changes in the availability of family-planning services.

Changes in Economic and Educational Factors Explain the Greatest Share of the Indonesian Fertility Reduction

When they took marriage timing and other behavioral factors into account, Gertler and Molyneaux estimated that increases in education and wages could explain roughly 60 percent of the decrease in fertility between 1982 and 1987. Increased availability of family-planning services could explain only 4 percent. (See the figure.) The negative contribution of "other" factors indicates that those factors, e.g., changes in women's age distribution, would, on their own, have led to an increase in fertility. When they replaced their model with one that estimated the direct relationship between changes in fertility and changes in factors external to the family (ignoring the behavioral choices through which the effects operate), there was no statistical difference between the results. However, the integrated model yielded more precise estimates.

While these findings have implications for investments intended to slow population growth in Indonesia, it would not be appropriate to infer that previous family-planning efforts had little effect. By 1982, the Indonesian population was already well supplied with family- planning facilities and services. It seems likely that the contraceptive supply network could easily have met the increases in demand, so that investments in the supply infrastructure had reached a point of diminishing returns. But this situation was brought about by previous family-planning investments. The RAND results therefore cannot be used as the basis for allocating resources in countries that are still in the process of developing a responsive network to supply contraceptives and family-planning services.

As for family planning in Indonesia, the RAND findings suggest that interventions promoting increases in contraceptive demand hold more promise than do policies that merely expand the distribution system further, although some lagging areas may require additional distribution resources. Indonesia has long attempted to promote contraceptive demand through information, education, and communication programs as well as through a complex political incentive system. These efforts should continue.

This report is part of the RAND Corporation research brief series. RAND research briefs present policy-oriented summaries of individual published, peer-reviewed documents or of a body of published work.

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