Household and Economy

Household and Economy

Welfare Economics of Endogenous Fertility

1st Edition - January 8, 1987

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  • Authors: Marc Nerlove, Assaf Razin, Efraim Sadka
  • eBook ISBN: 9781483274683

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Household and Economy: Welfare Economics of Endogenous Fertility deals with welfare economics and the socially optimal population size, as well as the social consequences of individual choice with respect to family size within each generation. The general equilibrium implications of endogenous fertility for a number of issues of population policy are discussed. In addition to their own consumption, the number of children and the utility of each child is assumed to enter the utility function of the parents. Comprised of 10 chapters, this volume begins with a review of social welfare criteria for optimal population size and the static theory of optimal population size, optimal population growth with exogenous fertility, and the theory of endogenous fertility. The reader is then introduced to the basic principles of welfare economics and the economics of externalities, followed by a summary of the traditional theory of household behavior. Subsequent chapters focus on optimal population size according to various social welfare criteria; real and potential externalities generated by the endogeneity of fertility; and the principal alternative reason for having children: to transfer resources from the present to support the future consumption of parents in old age. The book concludes by assessing the implications of endogenous fertility for within-generation income distribution policies and reflecting on the directions in which future research may be fruitful. This monograph will be of value to economists, social scientists, students of welfare economics, and those who wish to understand the contribution of economic analysis to an improved understanding of population policy.

Table of Contents

  • Preface

    1. Introduction

    1. Social Welfare Criteria

    2. Optimal Population Growth with Exogeneous Fertility

    3. Endogenous Fertility: "The New Home Economics"

    4. Where We Are Going



    2. Review of Weltare Economics

    1. Feasibility and Efficiency

    2. Competitive Equilibria

    3. The Relationship Between Pareto Efficiency and Competitive Equilibria

    4. Marginal Conditions for Pareto Efficiency and Competitive Equilibria

    5. The Social Welfare Function

    6. Second-Best Redistributive Policies



    3. Economies of Externalities

    1. Introduction

    2. Pigouvian Corrective Pricing for Externalities in Consumption

    3. Public Goods



    4. The Traditional Theory of Household Behavior

    1. Utility Maximization, the Marshallian Demand Function and the Indirect Utility Function

    2. Some Properties of the Indirect Utility Function

    3. Hicks-Compensated Demand Functions and the Expenditure Function

    4. Some Properties of the Expenditure Function

    5. The Relationship Between the Hicks-Compensated and the Marshallian Demand Functions

    Appendix: The Envelope Theorem



    5. Household Behavior with Endogenous Fertility

    1. A Generalized Model of Consumer Choice

    2. The Effect of Income on Fertility

    3. Conclusion



    6. Socially Optimal Population Size

    1. Criteria for Social Optima with Variable Population

    2. Individual Choice and Social Optima

    3. Optimal Population Policies

    4. An Infinite Horizon Model

    5. Conclusion



    7. Potential Market Failures

    1. Public Goods and Malthusian Fixed Land

    2. Efficiency with Infinite Overlapping Generations




    8. Real Market Failures

    1. Bequest as a Public Good within Marriage

    2. Investment in Human and Physical Capital and Transfers Among Siblings




    9. Children as a Capital Good

    1. A Simple Model of the Old Age Security Hypothesis

    2. The Old Age Security Hypothesis Reconsidered: A Microeconomic Analysis

    3. The Old Age Security Hypothesis Reconsidered: A General Equilibrium Example


    10. Intragenerational Income Distribution Policies

    1. Fixed Labor Supply

    2. A Model with Variable Labor Supply




    1. Tax and Transfer Policies

    2. Public Goods and Dynasty Taxes

    3. Intragenerational Income Distribution with Household Production and Endogenous Fertility

    4. Heterogeneous Family Preferences

    5. Uncertainty with Respect to Child Quality

    Author Index

    Subject Index

Product details

  • No. of pages: 174
  • Language: English
  • Copyright: © Academic Press 1987
  • Published: January 8, 1987
  • Imprint: Academic Press
  • eBook ISBN: 9781483274683

About the Authors

Marc Nerlove

Affiliations and Expertise

University of Maryland, College Park, U.S.A.

Assaf Razin

Efraim Sadka

About the Editor

Karl Shell

Affiliations and Expertise

Cornell University

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