The Effects of Mortality Changes on Fertility Choice and Individual Welfare: Some Theoretical Predictions

Abstract

The study of the effects of changes in child mortality on individual fertility decisions has been a cornerstone of the economic analysis of population. Empirical studies have overwhelmingly shown that a lower mortality rate leads to lower fertility. Yet, in even the simplest theoretical models of fertility choice, it has not been possible to satisfactorily analyze this relationship. This paper attempts to reduce this long-standing gap between theory and the empirical literature. The paper shows that a set of simple and plausible conditions is sufficient to yield the typically observed effect of mortality changes on fertility choice.

Another concern of this paper is to examine the effects of mortality changes on individual welfare. Though such welfare assessments are important for certain types of policy evaluations, they do not appear to have received attention in the literature. This paper presents some new and robust results on this issue. The analysis captures the dynamic stochastic feature of fertility choice, and also subsumes other endogenous choices (e.g., the quality of the children). The number of children is treated as a discrete variable; this added realism is in fact important for obtaining the results.