Seeking a Third World Population Policy

Two policies most commonly advocated for reducing population growth in poor countries are more rapid economic growth and more effective family-planning programs. Growth, it is believed, creates the desire for smaller families, and family planning provides the means.

There is evidence to support both positions. No country has ever achieved a high standard of living without a significant decline in its birth rate. Nor has any sizable country in modern times sustained low birth rates in the absence of significant economic growth. One can argue about exceptions to these generalizations and can point to some hopeful signs in one or two developing countries indicating that birth rates may fall in the next few decades before general economic development occurs. But, as generalizations go in this field, these two are better than most.

There is also growing evidence which suggests that easier access to the information, services, and supplies provided by modern family-planning programs is effective in reducing the gap between desired and actual family size. The extent of the effect in relation to the effort involved is difficult to judge because of substitutions between methods, simultaneously occurring social and economic changes that also influence family size, and difficulties in measuring levels and quality of effort. But there is no reason to doubt that such programs are capable of reaching and influencing those who are already motivated or easily encouraged to have small families.

For countries with good prospects for rapid socioeconomic development and reasonably good administrative infrastructures, sustained efforts in both these directions may indeed prove to be sufficient, though the time lags involved could be substantial. The most difficult problem arises in those countries that cannot achieve adequate rates of development in the near future, just because of rapid population growth. In such cases, the number of persons desiring small families may not grow fast enough to give even the best-run family-planning program enough to work on. If population growth is to be curbed reasonably soon, such countries must search for a third approach.

Each of the essays presented in our forthcoming volume focuses on one hypothesized socioeconomic determinant of fertility believed to be amenable to policy manipulation. The authors were asked to review what is know about the linkages between these determinants and fertility, to consider policies that might affect these determinants in a direction favorable to a decline in fertility, and to discuss research needs and possibilities to fill gaps in our understanding of these linkages and the efficacy of possible policies.

Those determinants included (1) income and its distribution; (2) the economic value of children; (3) education; (4) mortality, morbidity, and nutrition; (5) female roles and labor-force participation; and (6) preferences and tastes.

A wide array of results are found in studies that attempt to relate income to fertility. Some find a positive, others a negative, and still others a curvilinear relationship as family income rises from low levels; and in a few studies no relationship at all is found. Part of the reason for these mixed results is the poor quality of the available data. Income, for example, should mean the full family income a couple expects to receive over their lifetimes, not the money income received in a particular year and certainly not some per capita regional or national average. But the most important reason is a failure to separate statistically the demographic effects of income from those of other variables. Practically all socioeconomic variables that might be important in explaining fertility are correlated with income; unless these variables are identified and measured and adjustments are made for their effects, one cannot properly assess the pure effect of income, however carefully defined and measured it may be.

The effect of a change in income is likely to vary depending on whose income is being changed (which socioeconomic groups and which family members), how it is changed (through transfers, changes in the labor market such as increased wages or opportunities for more work, or changes in the ownership of wealth, for example), whether the change is considered transitory or permanent, and whether it is provided without reference to fertility behavior or is offered upon the condition of a change in such behavior (that is, as an incentive). It is at this level of detail that we are likely to find useful policy suggestions. For example, while the short-run effects on fertility of an increase in adult male earnings and opportunities for child labor are likely to be positive, both the short-run and the long-run effects of an increase in female wages or opportunities for work outside the home could well be strongly negative. Similarly, there is good reason to believe that a conditional transfer of income will have a strong negative effect on fertility, even if the underlying pure income effect is positive.

One's overall impression is that unconditional transfers of income, while they could well be effective in lowering fertility in the long run, operate through a wide variety of other variables associated with modernization and development. If one is to speed up the process, either these other variables must be identified and the most critical ones changed along with income (or the capacity to produce income), or the transfer must be made conditional upon an appropriate fertility response.

No one would claim that children are desired solely or even primarily because of their value as productive economic assets, but it would be a rare case in which this consideration was entirely absent. And so long as it is present to some degree, the economic benefits and costs of children are worth investigating, for they are far more capable of being influenced by policy than are most of the noneconomic benefits and costs associated with children.

The major economic value of children is obvious: their net contribution to the family income through their work (that is, their production minus their consumption), which usually increases in later life when they support aging parents. Unfortunately, the data in this area are not only scarce, they also answer the wrong question for policy analysis. What we find out, at best, is the extent of the economic contributions and costs of children, while what we need to know is how changes in these contributions and costs affect fertility. Still, an understanding of the economic role played by children may provide some hints about the feasibility of different policy alternatives and about the likely value of additional research to generate the more appropriate kinds of data.

The linkage between education and fertility poses a paradox for both researcher and policy maker. On the one hand, probably no other socioeconomic variable has a stronger negative association with fertility. Parents with more education have smaller families and parents whose children have more education also have smaller families. These relationships hold in both cross-sectional and time-series studies at both the national and the family levels and whether or not other important variables, such as income and place of residence are controlled. On the other hand, research has not provided adequate explanations for these correlations, with the consequence that most policy recommendations in this area remain on uncertain ground. Do the correlations imply causation or are other factors—such as industrialization and urbanization—at work to induce parents both to want fewer children and to give each a better education? Is the effect direct, or does it operate through other variables, such as female labor-force participation and wages, that might be influenced by policy more easily and quickly? Does education operate through changes in attitude, through changes in lifetime earnings potential, or both? Does its effect arise only when other factors are present, so that a number of policies—for example, education and jobs—must be combined for any to have a significant effect?

In this study, many presumptions and suggestions are made to answer these questions, but there is little or no evidence available to support them. While we know that educational attainment is strongly correlated, inversely, with family size, we know precious little more; this information is of little help in formulating policies within this sector.

It is frequently alleged that a fall in child death rates and better health and nutrition are necessary preconditions for a fall in fertility. Cross-country and historical evidence tend to support this proposition. But what role do these health-related factors play independent of changes in income, education, and social structure? How much effect can policies aimed at reducing mortality and morbidity and improving nutrition levels be expected to have on fertility, and with what time lags?

It is clear that pure biological linkages cannot explain the positive correlation between morbidity and mortality on the one side and fertility on the other. They might even suggest the opposite, that improvements in health, while not directly increasing the number of births, do increase the capacity to have more children. There is good evidence that raising the nutrition level of females results in earlier menarche, later menopause, and shorter periods of postpartum amenorrhea in nursing mothers. The linkage between male fertility and morbidity probably works in the same direction. Reductions in adult mortality, because they decrease the number of widows and widowers of reproductive ages, also increase the potential for more births. Only reductions in deaths among nursing infants point in the opposite direction, since the period of lactation and postpartum amenorrhea are thereby made longer; but the contraceptive effect of this change is far from sufficient to account for the observed declines in birth rates as infant death rates have fallen. If the correlation between morbidity, mortality, and fertility is to be explained, one must look for behavioral changes.

First, a decline in child mortality can be expected to increase desired family size, since the expected cost of rearing a survivor is thereby reduced and the benefits increased. An improvement in general health would work in the same direction.

Second, a decline in child mortality means that fewer births are required to achieve a given number of survivors. Given plausible assumptions about response elasticities, the net effect of these first two factors is to reduce births. But this decline in births is unlikely to be sufficient to offset the increase in population growth resulting from the decline in mortality, unless additional behavioral factors are brought into play

One such additional factor is the response of parents to uncertainty. A plausible response is overcompensation: parents may well prefer to have too many rather than too few surviving children. If this is the case, a reduction in child mortality, which is generally accompanied by a reduction in uncertainty as well, would reduce births by somewhat more than is implied by the first two factors alone.

Fourth, and perhaps most important, improvements in the rates of mortality and morbidity and in nutrition at all ages increase the returns on investments in human capital in relation to investments in nonhuman capital. This effect should encourage parents to invest more in both their own and their children's education and health and make them willing to have fewer children in order to finance such expenditures. They could also make it somewhat more attractive to postpone marriage to the extent that marriage and early child rearing are incompatible with investments in education.

While all these effects are plausible and more or less consistent with the evidence, there is very little information on their quantitative magnitude and none that adequately separates the various effects and lines of causation, including the biological, from each other. It is typical in less developed countries to find that the decline in child death rates precedes the decline in birth rates by at least a decade and that the decline in the latter compensates for less than the total decline in the former, leaving family size and the growth rate of population somewhat larger. But the variance around this average is sizable.

There are several reasons that a positive relationship between female labor-force participation and fertility may occur in developing countries.

First, the income effect could be much stronger at low levels of income. Indeed, it has been argued that poverty forces many women into the labor market even when it means a reduction in the quality of care their children get; this is equivalent to saying that, for these women, an increase in their wages could well permit them to work less, increasing the amount of time they would have available to bear and rear children. Second, large families and extended families make it easier to find substitutes for the mother's time in child rearing. Finally, the jobs set aside for women in developing countries often permit caring for children while working, or at least they make the two roles less incompatible than they tend to be in industrial countries. Role incompatibility cannot automatically be assumed in conditions prevailing in developing countries. To ensure a negative effect on fertility, the additional jobs provided for women must be deliberately chosen or designed to be for the most part incompatible with child rearing

The second factor presumed to lead to a decline in fertility is the greater voice in family decision making resulting from a job. There can be little doubt that girls with an independent source of income are in a better position to resist pressures to marry than are those without jobs. Moreover, evidence suggests that there is a positive correlation between the extent of the wife's involvement in family decision making and use of contraceptives. But whether the provision of jobs per se under conditions prevailing in poor rural areas would be sufficient to encourage a greater role in decision making, and whether that in turn— independent of other changes—would lead to a decline in fertility, is open to question.

While very little in the way of a theory of taste formation is available, it seems plausible that preferences can be influenced in the following three ways. First, education might directly or indirectly alter tastes—directly by inculcation of new attitudes and indirectly by helping to place a person in a new socioeconomic or occupational reference group with different fertility norms. Second, a person's desire for goods and services, in competition with bearing and rearing children, might be stimulated by mass media, advertising, or the increased supply of attractive consumer goods. Third, a person's norms regarding appropriate age of marriage and family size can change as a consequence of exposure to different life-styles. Such exposure can occur through direct contact with new acquaintances, often as a result of migration, or less directly through mass media (and education) in which different life-styles and different ways of handling common problems are portrayed.

Several policy issues cut across all aspects of the subject under study. The first issue is that of incentives—that is, changes that are conditional upon a favorable change in fertility-related behavior. The second issue is the need for a group of closely related and mutually reinforcing changes. Finally, we must consider the question of priorities: given all the possibilities we have surveyed, can we say anything about which is likely to have the highest benefit—cost ratio, defining benefits and costs to include more than just the economic magnitudes involved?

A wide variety of incentives has been suggested and a number are being tried. They can be positive (payments for acceptance of a vasectomy, for example, as in India) or negative (increased hospital and maternity fees and lower priority for public housing for parents with larger families, for example, as in Singapore). The incentive can be provided to the couple themselves (the only kind to be discussed here), to "motivators," or to the community at large (funds for public works projects dependent on achievement by a village of certain targets, for example, as once proposed for use in Maharashtra). They can be provided for changes in behavior ranging from the use of a particular method of family planning, changes in the age of marriage, increased spacing, or smaller completed family size. They can involve transfers of cash, goods, or services (the Taiwan education bond and the Pakistan proposal to offer life insurance for the oldest son, for example). Such transfers can be immediate or deferred (as in the case of the tea-estate experiment in India, in which payment at the time of retirement varies inversely with the number of children). While evidence on the effect of such schemes is sparse at present, it is likely to improve substantially in the next few years as the schemes under way mature to the point at which evaluation becomes feasible.

Whatever their nature, there are five principal arguments in favor of incentives. First, they are known to work in other fields. Price incentives to induce farmers to shift to new varieties, and differential tax rates to encourage investments in some fields and discourage investments in others are cases in point. Second, the conditional nature of the offer is useful in overcoming the positive income effect associated with many social changes. In addition, this factor reduces the social cost and risk involved in policy changes that would otherwise be difficult to reverse if the expected fertility effect is not forthcoming. These last two points can be explained by reference to an old-age security scheme: if the pension varied inversely with the number of children a couple had, the pronatalist effect of the higher lifetime income would be counteracted, and the scheme could be set up in such a way that no pensions would be provided unless fertility actually fell. Fourth, incentives can help to overcome the time lags inherent in many forms of social change. The principal effect of providing additional schooling to rural youths is likely to be felt only after they become adults, but if this schooling were offered on the condition that their parents limited family size, at least some of the effect would be shifted to the present generation.

Finally, and most important, the use of incentives obviates the need for knowing in detail the nature and strength of the principal determinants of fertility. Incentives should work so long as something considered to be of value by the recipient is provided, whether or not it compensates him in kind for the loss he incurs from having fewer children. It is likely to be more socially acceptable if it does provide such a compensation, but it is the perceived, not the real, value of children that counts in gaining such acceptability and that is easier to discover through research.

This point can be pushed further by considering the three main views held about the general nature of the population problem in less developed countries. Some argue that people want to limit fertility but do not have effective means. Others assert that individuals have reason to limit fertility but are not sufficiently motivated because of lack of knowledge and the persistence of old attitudes and values. Still others argue that given the present environment within which parents in less developed countries live, they do not have good reason to lower their fertility and cannot be motivated to do so in the absence of substantial social, economic, or political change. Incentives can be effective no matter which of these explanations is correct. If the first is correct, the incentive will induce people to find effective methods or demand that they be given them. If the second proves to be correct, the incentive will help speed up the adjustment process, just as high "incentive" prices for food grains in India and Pakistan in 1967-68 increased the rate of adoption of the new hybrid seeds. If the third explanation is correct, the incentive serves as a substitute for the social change that has not yet occurred. At a minimum it will change behavior without affecting attitudes in any fundamental way, but given normal dynamics of attitude formation, changes in attitude will follow the changed behavior in order to justify and rationalize the latter, thereby reinforcing the behavioral change.

There are, of course, a number of arguments on the other side. If used by itself, the incentive may have to be quite large, causing budgetary and possibly also political problems. In any event, some types of incentives may be considered distasteful, despite the fact that they are openly and blatantly used in other walks of life. Third, implementation of incentive programs sometimes poses difficult administrative problems, among which are possibilities for the misuse of funds. Fourth, a number of persons might receive payments who would have behaved as they did in any case; where such a problem exists, special efforts must be made in the design of the scheme to minimize this consequence.

Whatever stand one may take with respect to incentives, they do appear to be an excellent instrument for social experimentation. Indeed, the doubts and questions about incentives can probably not be answered otherwise. How else, for example, can one determine how large the incentive must be or whether the administrative problems can be solved and whether favorable or unfavorable changes in attitudes are likely to occur as a result of their use?

Closely related and mutually reinforcing changes are likely to be much more effective than a piecemeal approach. An incentive for girls to postpone marriage will be far more effective if combined with increased opportunities for them to use their time constructively. The provision of increased educational opportunities may not be taken advantage of unless it is clear that the education is useful and needed and that it opens up additional job opportunities. Mass media may stimulate the desire for a higher standard of living, but the result will be frustration unless opportunities are provided for improving the standard of living.
This point can be carried further. To induce parents to value "quality" over "quantity" will require opportunities to increase lifetime income, better training to take advantage of these opportunities, reduced mortality to increase the expected returns from long-term investments, and, quite possibly, some kind of community or peer-group support to encourage the individual to break with tradition and bear the uncertainties involved in a new approach to lifetime planning.

The problem is to choose just the right set of changes, sufficient to induce the proper behavioral response yet not so comprehensive as to be infeasible. In the last analysis the determination of the appropriate package probably involves more art and intuition than it does science.

In all cases, countries should start with vigorous programs of family planning. In countries that do not anticipate any serious problems associated with population growth, such a supply-oriented approach may be sufficient. But if population pressure is expected to be severe in the future, even though it is not today, and if there are good prospects for growth and modernization in the meantime, it would be useful to add a demand-oriented approach that tries to influence the economic-development program in ways that speed up a country's transition to a low-fertility regime. The provision of more and better primary and secondary education in rural areas, especially coupled with an attempt to attract girls into the schools, the correction of factor-price distortions that dampen the demand for labor (including, of course, female labor), the elimination of discrimination against women in labor markets, and the movement of people out of traditional agricultural areas into more modern sectors as quickly as development permits are all cases in point. It is at least as difficult to establish priorities within this area as it is to indicate how to get general development going. But it is likely that placing an emphasis on such high demographic-impact programs would alter the style and composition of development in significant ways.

As we have seen, a number of the programs that would be included in such an approach can have positive income effects in the short run; indeed, it could take several decades before the long-run negative effects gathered sufficient strength to offset them. If the population problem is more immediately pressing or is likely to become so before this approach has time to work, more emphasis should be placed on the use of incentives, deliberate efforts to alter preferences (using mass media and other approaches), and institutional and organizational changes that represent somewhat more direct intervention into the determinants of the family's decision-making process.

If, however, the population problem is more urgent yet, creating severe short-term pressures and threatening to swamp the development program altogether, more coercive measures, such as prolonged separation of the sexes through drafts for military and work-camp service and compulsory sterilization after the bearing of a certain number of children, may be called for. We have deliberately not considered such measures. If we get on quickly enough with the tasks of developing and testing less draconian policies, we may hope that the number of cases in which they have to be used will be few and far between.