Question

An increase in female non-agricultural wage employment opportunities is likely to reduce birth rates if the price effect is stronger than the income effect. Explain with a graph.

You have been asked by the minister of the economy in your country to make policy recommendations pertaining to your country’s high rate of growth of population growth among the poor. Displeased with the prospect of growing poverty the minister is hesitating between providing subsidies to poor families to reward them for few children or increasing funding to health care. Not being able to afford both policies, which of the two areas will you suggest that funds be allocated to? Write a report to the minister, justifying your choice and explaining why you think that your chosen area will contribute most to reducing poverty among the poor. Make sure to look at the problem from all sides.

Answer 1

I would suggest the minister to provide reward for few children . The poor actually needs many things other than the health care and they don't frequent the health care facilities unless and until it is something extremely dire at hand. Providing them with cash rewards will actually enable them to use it for the purpose of education or vocational training or maybe to mend that leaking roof or buy a new set of hygienic clothes or the equipment for the sport practice. The point here is the poor will be able to use the money as per their subjective need. While spending the available money in the health care will limit the benefits only to the point of health care also the benefits can be availed by the affluent sections of the society leaving the poor in the same miserable state. And more than health care the need of the weaker sections of the society depend on food housing sanitation and education. And the ability to provide education to students will surely enable them to become an asset for the society and help their families out of the poverty. Education is the key to ultimate freedom from all suffering and providing cash rewards will fulfill this purpose. Also if the government sets a limit for reward that is gives reward to first three of two children then the family will start practicing birth control leading to a control in population as well. In any way it is a win win situation.

HAVE A GOOD DAY !