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Overview
The author develops an integrated model of fertility behavior featuring an original way of defining and measuring the relative cost of an extra child. U.S. fertility patterns in the twentieth century, he shows, are partially explained by the interplay of a model of intergenerational taste formation and fluctuation in relative child costs. His reinterpretation of patterns in the inequality of schooling and income in America highlights the role of fertility and other demographic forces. From the author's analysis it appears that concern over rapid population growth is more justified on income-distribution grounds than on grounds of effects on average per capita income. In showing that this is so, Professor Lindert describes how families' use of time has changed since the late nineteenth century.
Originally published in 1978.
The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These editions preserve the original texts of these important books while presenting them in durable paperback and hardcover editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.
Product Details
| ISBN-13: | 9780691613000 |
|---|---|
| Publisher: | Princeton University Press |
| Publication date: | 03/08/2015 |
| Series: | Princeton Legacy Library , #1503 |
| Pages: | 408 |
| Product dimensions: | 6.00(w) x 9.00(h) x 1.50(d) |
Read an Excerpt
Fertility and Scarcity in America
By Peter H. Lindert
PRINCETON UNIVERSITY PRESS
Copyright © 1978 Princeton University PressAll rights reserved.
ISBN: 978-0-691-04217-6
CHAPTER 1
The Issues
Since before Malthus, scholars have maintained a strong interest in both sides of the circle joining human fertility with the economy. The intuition persists that higher fertility, and population growth in general, must make natural resources more scarce and reduce material living standards, even though the data have not yet confirmed this pessimistic view. Scholars have also been recurrently fascinated by the possibility that economic forces may help us explain movements in fertility itself. This book takes up both kinds of issues. It seeks to redirect our concern over the economic consequences of higher fertility and population growth toward more emphasis on their tendency to heighten economic inequalities. It also seeks to improve upon our knowledge of how economic developments affect fertility.
There are reasons to be concerned about the economic implications of bringing extra babies into the world, but there is also reason to believe that the scholarship on this issue has not yet succeeded in resolving which reasons for caring are most compelling. Population growth has been suspected of (1) lowering aggregate income per capita, (2) making natural resources more scarce, (3) lowering environmental quality, and (4) making incomes more unequally distributed. The first of these concerns deserves less emphasis than it has received, while the last deserves more.
To be a proper object of social concern, extra births must have clear negative effects on the well-being of persons outside the individual family having the extra children. It must also be shown that these negative effects outweigh other positive effects that transcend the family. If the social costs of an extra child are borne only by his parents and older siblings, the extra birth is the family's business and not society's.
This simple welfare rule of thumb is one that has not been well heeded by past attempts to show that extra births reduce income per capita. An extra child may lower income per capita without harming anyone. Income per family member is almost sure to be reduced by the arrival of an extra child. The child is an extra mouth to feed, an extra "capita" in the ratio of income per capita, and this almost invariably outweighs his net contribution to family income, even in less-developed settings in which a child gives more work value to his parents' household than he detracts from the earnings of other family members. The extra child might reduce national income per capita only to the extent that he reduces income per capita within his own family. A voluntary decision to have an extra child may thus have no more serious social implications than a voluntary decision to retire from the labor force and enjoy more leisure time. Both decisions lower aggregate income per capita, yet this effect on income per capita is a weak basis for urging that society discourage such private activities.
The concern over the effects of fertility on income per capita has been misdirected for other reasons as well. Superficial looks at international cross sections have failed to reveal the expected negative relationship between the rate of population growth and the rate of growth of national product per capita. It could be argued that these glances at cross sections are not a fair test of the proposition that population growth drags down the rate of growth of income per capita. It seems more useful, however, to take these simple results as another clue that to establish the economic case for restricting fertility, one must look beyond income per capita.
The absence of a simple correlation between population growth and income-per-capita growth suggests that increases in population have not pressed so relentlessly against nonrenewable natural resources as intuition and David Ricardo have said. A little reflection confirms that population growth need not constrain economic growth by making natural resources more scarce. Population growth does not affect all sectors of the economy proportionally, nor do all sectors use natural resources in the same proportion. It might be the case that population growth causes a shift in resources away from the sectors that use natural resources most heavily. This possibility deserves to be explored, the more so since there has been no long-run historical trend toward higher relative prices for most natural resource products. Such a re-examination of the link between population and natural resource scarcity would require a book in itself, and is not attempted here.
The lack of a clear effect of population growth on income per capita also suggests other ways of redirecting the inquiry into the economic case for discouraging births. First, any further investigation of the effect on aggregate living standards ought to drop income per capita in favor of (full-time) income per lifetime as a welfare proxy. We care about the length of life as well as income per year. Attention should be given to the strong possibility that extra births may reduce life expectancy by spreading infectious diseases and by lowering living standards and disease resistance in poor families, thus burying those whose welfare losses are hidden from the measurement of national income per living person per year.
More important than this adjustment of the old income-per-person yardstick is the pursuit of two sets of potential "externalities," or "spillover" effects, of extra fertility that are missed by any ordinary measure of income per person. One set consists of the environmental externalities imposed on others through pollution and congestion. The other consists of externalities transmitted through the effects of extra births upon the distribution of income. Extra children may on balance raise social tensions and cries of injustice by transferring income from less fertile to more fertile households, or from poor to rich. Persons who care about such redistributions of income may bear external costs from fertility increases, or receive external benefits from fertility reduction.
Both sets of externalities deserve further exploration. In recent years the concern over population externalities has focused almost exclusively on the environmental effects. Some of the environmental externalities from population growth appear to have received more than their share of emphasis. To be sure, the average extra child would tend to pollute and crowd the world a bit if nothing were done to check this influence. But there is no reason to work on restricting fertility while leaving other things equal. As other authors have pointed out, restricting human numbers is a grossly inefficient way of combating most kinds of pollution. Direct disincentives to engage in the polluting activity itself are much more efficient. The importance of emphasizing the environmental externalities is also often limited by a failure of the locus of the problem to correspond to the locus of extra population growth. Pollution, for example, seems to impose much higher psychic costs on higher-income countries than on lower-income countries, which are not willing to give up much economic development at all to reduce pollution. The demand for clean air and clean water is highly income-sensitive. It seems, on the other hand, as though significant further reductions in the rate of population growth in higher-income countries are unlikely now that the rate has tapered off toward zero. There is reason to think that policy could make major reductions in the rate of population growth only in countries now characterized by rapid population growth, the very countries in which policy-makers place the lowest values on the quality of ambient environments.
This is not to say that all of the environmental externalities from population growth have been overemphasized. There is prima facie evidence that population growth imposes congestion costs and changes global climate in ways that are hard to offset completely without attacking population growth itself. It may be, for example, that all sorts of basic human activity, such as breathing, burning fuel, and cultivating dry lands, have the effect of shifting the monsoons dangerously toward the equator, bringing sustained drought to the populous monsoon zone stretching from Sahelian Africa through Northern India to the Philippines. Such possible congestion and climatic effects may prove very serious. Not enough is yet known about such effects. They fully deserve the attention they are receiving. They cannot be pursued here, however.
The possibility that higher fertility and population growth may make incomes more unequally distributed has received relatively little attention. The possibility that rapid population growth may depress wage rates is frequently mentioned and then dropped. This is curious in view of the fact that concern over the income distribution remains widespread. The degree of inequality in personal purchasing power is a public good, one that different people value differently. It is an aggregate outcome, possessing the two properties that define a public good: "nonexhaustion" (my enjoyment of the degree of equality of incomes does not keep you from enjoying or disliking it) and "nonexclusion" (once it is available, it is available for us all). If population growth tends to heighten inequalities, it has a subjective cost that can be very important even if not easily measured. If there is a strong link between extra fertility and inequality, then extra fertility has an external cost which society should consider shifting to young couples with measures discouraging larger families.
If there seems to be a case for worrying about a fertility-inequality link in a high-income country, there is an even stronger case in the low-income countries, which tend to have higher income inequality, higher fertility, and more rapid population growth. In many such countries a link between fertility and inequality would be a link between fertility and death. It may be that the high fertility of low-income countries causes millions of deaths each year — again, without noticeably reducing in come per capita per year. The exploration of this issue in Chapters 6 and 7 below reflects and supports this very suspicion about the importance of fertility restriction in low-income countries. It just so happens that the issue is best pursued here by following the better-documented American experience, one which tells a pessimistic story about low-income countries in mirror image, by linking the decline in American population growth to the twentieth-century decline in American inequality.
There are many plausible theoretical reasons for suspecting that higher fertility will lead to greater inequality of income, and that reducing fertility will equalize incomes. Some of these are microeconomic in the sense that they are theories about how changes in fertility affect the distribution of individuals' economic endowments within a fixed set of wage rates and rates of return on property. Another relates to the supply of school support from governments and nonprofit agencies. Still others are theories about the macroeconomic effects of fertility on rates of pay. Let us review these arguments, expressing each as reasons why fertility reduction might equalize incomes.
There are, first, two relatively subtle microeconomic reasons for believing that fertility reduction would level incomes:
(1) A reduction in fertility lowers the dispersion of family sizes, since birth restriction typically reduces the number of children born into very large families by a greater percentage than it reduces the number of first-born and second-born children. Since larger family size seems like a factor that should retard the development of earning capacity in individual children, the reduction in family size differences ought to reduce later earnings inequality.
(2) Since about 1910, birth restriction in the U.S. has on balance reduced the share of children born into poor and less-educated families. The same should be true of birth restrictions from 1970 into the future, since surveys have found that in the 1960s unwanted births were still a greater share of total births among the poor. Birth restriction should thus tend to lower income inequality by cutting down on the share of children born into the extreme disadvantage of being unwanted members of large low-income families.
Both of these arguments hinge on the view that extra children strain family economic and emotional energies.
One might also suspect that reductions in fertility ease the strain on the public and philanthropic supply of resources for schools, uplifting and leveling the earning power of each generation of children:
(3) If the total amount of philanthropic and taxpayer support for schooling is characterized by inertia, then the strain on school systems should be directly related to the share of the population that is of school age. Reducing births may reduce the ratio of children to adults more than it reduces public (and philanthropic) school expenditures per adult, so that the smaller cohort of school-age children enjoys greater public educational outlays per child. To the extent that this public-support effect is more relevant below college than it is for public funding of higher education, the extra public expenditures per child should help the most disadvantaged children the most. This should reduce inequalities of schooling and income.
This presumption may not be shared by all. One could easily imagine that the effect of fertility decline is exactly the opposite. It is possible that fertility decline would actually reduce public support per child for lower-level schooling and for education in general, by reducing the share of voters directly concerned about school quality. Fertility reduction, in other words, might spark a taxpayer revolt, in which currently childless taxpayers demand so much relief that school inputs drop even faster than the number of children. This same argument about the relative voting power of parents would predict that a baby boom would subsequently raise school support per child. Probably more people share the "strain on public schools" belief [(3) above] than believe in this voting-power hypothesis. The matter of which argument makes more sense is an empirical question addressed briefly in Chapter 6 below [which finds evidence in favor of (3) and against the competing hypothesis].
There are also several macroeconomic reasons for believing in a long-run link between fertility and inequality. Since Malthus and earlier, many observers have believed that population growth depresses wage rates by supplying more workers. This belief seems to have been Malthus' main economic reason for being convinced that poor relief, which he felt would breed larger families, would create even more poverty. Similar concern about the link between fertility and wage rates has at times been voiced by friends of labor and of business. In early nineteenth-century England, Francis Place, a birth control propagandist born into the working class, distributed handbills "To the Married of Both Sexes of the Working People," urging them to restrict births for the sake of future wages:
By limiting the number of children, the wages both of children and of grown up persons will rise; the hours of working will be no more than they ought to be; you will have some time for recreation, some means as well as some time for your own and your children's moral and religious instruction."
On the other side of the wage bargain, it was apparently business concern over the future of labor costs that recently caused Japan's former Prime Minister Eisaku Sato and Japan's Population Problems Inquiry Council to urge a crowded Japan to raise its fertility.
A little reflection suggests that this basic argument can be divided in two:
(4) A drop in fertility would mean fewer labor-force entrants a generation later. This in turn should accelerate the rise of all employee wage rates — skilled and unskilled — relative to profit rates and to rates of return on property. Since the ownership of property is almost always distributed less equally than is human earning power, a rise in employee wage rates relative to rates of return for property holders and profit recipients makes income more equally distributed.
(Continues...)
Excerpted from Fertility and Scarcity in America by Peter H. Lindert. Copyright © 1978 Princeton University Press. Excerpted by permission of PRINCETON UNIVERSITY PRESS.
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Table of Contents
- Frontmatter, pg. i
- Contents, pg. v
- Preface, pg. ix
- CHAPTER 1. The Issues, pg. 3
- CHAPTER 2. The Argument in Brief, pg. 14
- CHAPTER 3. Remodelling the Household for Fertility Analysis, pg. 37
- CHAPTER 4. The Relative Cost of American Children, pg. 83
- CHAPTER 5. American Fertility Patterns Since the Civil War, pg. 137
- CHAPTER 6. Fertility and Investments in Children, pg. 181
- CHAPTER 7. Fertility, Labor Supply, and Inequality: the Macroeconomic Evidence, pg. 216
- APPENDIX A. The Job-Interruption Effect on Wage Rates as a Part of Child Cost, pg. 261
- APPENDIX Β. The Work-Time Effects of Children in the Home: Regression Results, pg. 274
- APPENDIX C. Time Inputs into Siblings, 1967-68: Hypotheses and Estimates, pg. 285
- APPENDIX D. Net Effects of Children on Family Consumption Patterns, 1960-61 and 1889-90, pg. 322
- APPENDIX Ε. Total Child Costs and Child Inputs, 1960-61, pg. 346
- APPENDIX F. The Index of Relative Child Costs, 1900-70, pg. 374
- APPENDIX G. Selected Data Used in Regressions on State Child-Woman Ratios, 1900-70, pg. 381
- Index, pg. 391