Question

1. According to Becker’s economic theory of fertility, a couple’s desired family size is influenced by economic conditions that affect the private benefits and costs of having children.
   1. Explain how each of the following changes affects the total fertility rate (if it is possible to predict).
2. 1. Free public education system is introduced
3. 2. Infant mortality rates fall after the introduction of various public health measures
   3. Increase in skill premium (or returns to education) caused by trade liberalization

Answer 1

Total fertility is defined as the average number of children a female is expected to give birth in her lifetime. This rate is affected by multiple factors.

i. When there is introduction of free public education system then the costs of having children falls because now the doesn't have to spend money on education and once eduacted, the child can easily get a job which increases benefits to the family. Therefore, total fertility rate increases.

ii. Infant mortality rate is the number of children who die under the age of one in a geographical area. If the number of dying children falls due to the introduction of various public health measures then total fertility rate falls because earlier, females gave birth to more children expecting that the child may not survive any disease due to bad health care facilities.

iii. When there is an increase in skill premium (or returns to education) caused by trade liberalization, the benefits to the family will increase. The more the number of children, the more the benefits. So, total fertility rate will rise.