Microeconomic analysis of fertility choice: Evidence from Republic of Benin

Abstract

This article presents the economic theories of fertility choice within a framework of microeconomic analysis. It focuses principally on the determinants of fertility choice, such as the income and cost of children, education, and parents' time availability, particularly female parents. After analyzing the Becker model of household fertility choice, we link the demand for both the quality and quantity of children with time allocation in fertility behavior, following the Schultz model. From the Becker model of fertility choice to Schultz's model of time allocation, the common hypothesis is the relationship between fertility choice and income. For quantitative results, we perform a calibration by calculating the elasticity of demand for children both in terms of quantity and quality. Through this calibration, we find that as income rises, parents reallocate resources from quantity to quality of children: while fertility declines over the years, investments per child increase significantly, leading to a rise in the average years of total schooling to improve child quality. A 1% increase in income raises total household expenditure on children by at least 0.65%, despite lower fertility; the opportunity cost of parents' time also rises. The results further reveal that children's services are more time-intensive than other household production goods, and female parents' time is used more for household production, which reduces female labor market participation.