| Chapter 2: | Background and Theoretical Development |
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from the work of Leibenstein and Becker in the late 1950s and early 1960s. Its basic argument is that fertility is a result of conscious decision and deliberate, purposeful action (Robinson, 1997). Under this assumption, Leibenstein (1957) argued that families balance utilities against disutilities ascribed to an nth child to determine whether a family wants an nth child. Becker (1960) reformulated this idea by adapting a household production function paradigm, thus linking fertility to other household economic processes, including labor force participation and consumption. This extended model is usually referred to as the household production model (T. P. Schultz, 1981), and it is basic to contemporary microeconomic theory.
The most widely used and fundamental principle of any economic framework assumes that children are consumer durables (i.e., a good that lasts a long time); an increase in income is likely to increase fertility. This idea was first introduced by Becker (1965). The theoretical framework, called the new-home economics approach, assumes that the interests and power of the sexes within family units are identical, even if their roles are not (T. W. Schultz, 1974). The new-home economics model provides a necessary analytical framework to study the nonmarket allocative decisions, especially those related to the production of children (Nerlove, 1974; Willis, 1973). An extended model was introduced by T. P. Schultz (1981). The basic premise of the new-home (or household) economics approach explains the way in which investments in human capital increase the value of human time. This increase in the value of human time changes the resource constraints and relative costs and prices that households face in their decisions regarding the number and quality of children they attempt to produce (T. P. Schultz, 1981).
The household income hypothesis assumes that as income rises, consumption of goods and services increases. Thus, assuming