CONTRACEPTION AND THE INCOME-FERTILITY RELATIONSHIP

‘We art: grateful fur l~lpfi.11 comments fl-on1 Robert G. Chambers, &-we Gardner, John Horowitz, and Marc Nerlove, for word processing assistance from Lien Trieu, and for computer graphic assistance from Jeff Cunningham. This research was supported by the IRIS program at the University of Maryland at College Park. The puzzling result that income growth is generally associated with decreasing fertility has generated a large literature. Economists have been reluctant to classify children as an inferior good and so have offered alternative explanations for the negative impact of income on birth rates. The predominant conclusion is that parental preferences are biased toward child quality, and away from child quantity, as income increases. If this very specific form of non-homotheticity exists, number of children may decline with income. In this paper, we expand the standard fertility model to incorporate child avoidance costs and the disutility of births. These additions allow us to derive a negative relationship between income and fertility without relying on any specific a priori restrictions on preferences. CONTRACEPTION AND THE INCOME-FERTILITY RELATIONSHI