Effect of fewer births on average income

Summary

This study analyses, for the dynamic economy of a typical less developed country (LDC), the significance for economic development over 30 years of gradual reductions in age-specific fertility rates (assumed to result from a government-supported birth reduction campaign).

The computer results, using parameters typical of poorer LDCs, include the following:

1. A modest birth control programme, costing perhaps 30 cents a year per head of national population, can raise average income over only 15 years by almost twice the percentage that it would rise without birth control;

2. Such a birth control programme, including more exposed couples every year until half of them are practising contraception, yields an undiscounted return on cost of 13 times in 5 years and 80 times in 30 years;

3. The value of permanently preventing the birth of a marginal infant is about twice an LDCs annual income per head;

4. Without birth control, to achieve similar rises in income per head, the rate of productive innovation would have to be about 1½ times the typical rate assumed;

5. Saving propensities would have to be from 2 to 3 times as great as are assumed typical if similar income increases per head are to be realized without birth control.

The model employed uses age-specific death, fertility, and consumption rates for an annually changing age distribution of population. It also uses a national production function that takes into account the changing stocks and productivities of labour and capital, saving propensities that vary with disposable income and the rate of productive innovation. Consequently, it can trace, in more detail than any demographic–economic model yet described in the literature, the incidence of whatever fertility reductions may result from government or private birth control programmes.*