A comparative study of the fertility transition in different rural areas of Thailand and Costa Rica

with special emphasis on the old age security motive

Proposal for Dissertation

Sanjeev Sabhlok

Under the guidance of

Professor Jeffrey B. Nugent Chair,Professor Richard A. Easterlin Member,Professor Cheng Hsiao Member,Professor John E. Elliott Member, Professor Harry W. Richardson External Member.

Preface

This proposal is being structured in the form in which I expect to bring out the dissertation. Most chapters are preliminary explorations in the concerned area, and work on others (empirical chapters) has not yet begun. At this stage, the focus of the topic has been defined, a broad literature survey carried out, and a basic theoretical model worked out. As a pause in this process of research, marking the end of the ECON 790 (Directed Research) course that I have taken this semester with Professor Nugent, I thought it appropriate to acknowledge the people behind this research.

After Professor Nugent introduced me to this area during a discussion in January, 1997, I felt that there was a lot of interesting work to be done, and so I chose to work in this area of demographic economics. I would like to thank him for giving me the opportunity to work under him in this area where he is considered perhaps the leading authority in the world. I would also like to thank him for constantly keeping me on my toes throughout the semester, guiding me to various readings, going through my ‘preliminary drafts’ listening to my ‘ramblings’ while I was not quite clear which approach might actually be at work, and most significantly, pointing out the complexities of ‘reality’ and alternative motivations that might be at play, each time I thought I had achieved some measure of understanding.

I would like to thank Professor Easterlin for introducing me to the discipline of demographic economics in Spring, 1996, wherein I learnt about his synthesis theory which has made such an major impact in world literature on the economics of fertility. Professor Maurice Don Van Arsdol, Jr. of Sociology Department (Population Research Laboratory) has been a powerful force in my thinking, by showing me the alternative currents in the discipline, which is now extremely inter-disciplinary, during a course I took with him in Summer, 1997. I would like to thank Professor Kuran for introducing me to the disciplines of evolutionary psychology and evolutionary biology and of the necessity of considering their findings in modeling the human mind during the course I took with him in Fall, 1995. I would like to thank Professor Robinson for the interest he has taken in this area and the discussion I had with him on this topic. I would like to thank Professor Caroline Betts for giving me an opportunity to present this proposal on the 25th of April in the Graduate Students Workshop, and for throwing up many valuable suggestions during that presentation.

Among the students at this department, I would like to thank C.V.S.K. Sarma, Shailender Swaminathan, Sunanda Ray, Sripad Motiram, Atul Gupta, Lata Gangadharan and Pushkar Maitra, among many others, for helpful discussions at various stages.

Finally, I would like to formally thank members of my Guidance Committee for kindly agreeing to be on my Committee and critiquing this bulky document.

28th of April, 1997 Sanjeev Sabhlok

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Contents

Chapter Contents Page PART I THEORETICAL UNDERPINNINGS

1 Introduction 4

2 A Superstructure of Theory 16

3 Theoretical and Empirical Models to be used in the Dissertation 50

PART II EMPIRICAL ANALYSIS

4 The Setting of the Surveys, and Preliminary results 63

5 Testing of the Models 88

6 Conclusion 89

References and Select Bibliography 90

Appendices 109

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PART I

THEORETICAL ANALYSIS

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Chapter 1Introduction

1.1 Introduction

The old age security hypothesis (OASH) states that an important reason for people having children is to provide for them when old. This motive for fertility has been accorded differing significance in the literature. Some believe that it is a powerful motive and therefore, by providing for the old through some mechanism, say through old-age pension programs, it will be possible to reduce the demand for children. Others believe that its role is relatively small in determining fertility. Following the work of Nugent and Anker (1990), I will attempt to formalize the theoretical basis for this argument, and to examine whether the changes in fertility over the past thirty years or so in rural areas of Costa Rica and Thailand, could at least partially be attributed to this motive.

The key differences between Costa Rica and Thailand have been summarized in Nugent and Anker (1990). I am placing some of these differences in Table 1. In terms of key indicators of modern economic growth, Costa Rica was clearly at a higher level of human development than Thailand around 1970. Accordingly, it was not surprising that it had a much lower fertility rate than Thailand. Additionally, Costa Rica has had in place, for many decades now, a relatively strong1 governmental structure for provision of security to the elderly. Finally, it appears that in terms of development of financial markets, Costa Rica has been more advanced than Thailand, allowing for greater alternative modes of savings than in Thailand.

Accordingly, if the OASH were true, one would expect that Costa Rica would lead Thailand in further declines in fertility. Even other, more commonly held theories of fertility decline would tend to predict that Costa Rica would do better. However, it turns out that fertility declines in Costa Rica have been rather minimal, while Thailand has made enormous progress in reducing its fertility.

Table 1: Basic economic and demographic indicators, Costa Rica and Thailand, 1965-1990.

Costa Rica Thailand1965 1990 1970 1990

Estimated population 1.2 3.0 26.4 55.7GNP per capita 1109 1690 471 1000Infant mortality (per 1000) 72 18 73 27Female secondary enrollment (% age)Mean years of schooling (25+)

25 415.6

15 283.5

Percentage urban 38 47 13 23Total Fertility Rate 4.9 3.1 6.29 2.4

1 Gomez and Nugent (1995) point out the “dubious financial viability of Costa Rica’s social security system.”

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Source: Data is from World Bank (1993:20-21) unless stated otherwise.Notes: The GNP per capita of 1965 and 1970 is in constant 1987 US dollars.

Total Fertility Rate is defined in the Population Handbook.Population of Costa Rica (1965) and Thailand (1970) relates to 1960, as given in

the Human Development Report, 1991. (HDR) Estimates for TFR for 1990 are from HDR, 1991.

Estimate for TFR for Thailand for 1970 is for 1964-65, from CICRED (1974), The Population of Thailand.

Estimate for TFR for Costa Rica for 1970 is from Gomez and Nugent (1995), who cite thea World Bank publication of 1995.

Estimate for GDP per capita for 1990, is in constant 1988 USD, from HDR, 1991.Estimate for IMR for 1990 relates to 1989, and is from HDR, 1991.Data on mean years of schooling of persons above the age of 25 years is from HDR, 1991.

Thailand is not the only such nation. In many other traditional societies, rapid reduction in fertility has taken place despite there being no alternate system in place for the elderly, and despite the fact that people can now look forward to a much longer duration of old age, which might include infirmity. It is hypothesized in this paper that the institutional structure for satisfying the old age security motive (OASM) has a lot to do with explaining the observed facts. “Numerous studies show that a person’s earnings are higher the higher their human capital, as measured by their education and health status.”2 Therefore, a revised OASH is being suggested here: The asset demand for children is being met in Thailand by parents investing more on fewer children, in order to capture the rents from modern economic growth during their old age through these fewer, educated children. If old age care is relatively guaranteed even from very few children, then the family has a greater incentive to respond to the economic incentives provided by modern economic growth.3

At this stage, one should note that comparisons between two distant nations can at best be extremely tenuous. Other competing hypotheses might emerge as candidates for explaining some of the facts observed above. It could be argued, for example, that due to the increasing incomes of parents (particularly increasing female labor force participation), the rate of growth of the opportunity cost of time in Thailand was high enough to make children extremely costly. It could also be argued that some other, better alternatives to children, were suddenly made available in Thailand for transferring wealth across time. The World Bank (1993:244) tested for Granger causality and found that GDP growth rates have ‘caused’ higher savings in Thailand. But this does not mean that household savings have necessarily increased. Campbell et al (1993: xxiii) state, in the context of Thailand, that “the household saving ratio, at the aggregate level, has not responded to favorable demographic trends.”

The study will therefore examine a broad set of explanatory variables which are recognized in the literature to impact on fertility, while attempting to isolate the effects of OASM and related institutions for old age care. The empirical study will also attempt to go into the relative differences in decision making within the household. Use of will be

2 World Bank (1993:197).3 One must admit that aggregate data does not readily lend support to such a major private investment on education. However, micro level data might unearth such trends.

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made of the old age security survey (OASS) carried out in Costa Rica and Thailand in 1991-2 under the supervision of Nugent and Anker, supported by the International Labor Organization. Since the data is extremely disaggregated, it will be possible to utilize inter-regional variation within these two nations, to test the hypotheses.

The dissertation will be organized in two parts: Part I will comprise the theoretical underpinnings, and Part II, the empirical analysis. In Chapter 2, based on a literature survey, I shall establish a superstructure of theory for looking at the observed declines in fertility as well as an apparent lower limit to fertility. I will also investigate the link between the old age security motive and fertility. Chapter 3 will outline the models - both theoretical and empirical - to be used in this dissertation.

Moving to the empirical part (Part II), in Chapter 4, I will outline the demographics and economics of Thailand and Costa Rica, with particular reference to work done on understanding the impact of old age security on fertility in Thailand. The OASS will be discussed, and its basic results considered, in this chapter. Chapter 5, which has not even been outlined at this stage, will deal with the testing of the proposed models and the results obtained therefrom. Chapter 6 will conclude the dissertation.

In the remaining sections of this chapter, I discuss some basic policy questions about population policy, and examine the origin of the old age security motive.

1.2 Is high population bad for economic growth / human development?

It is useful to take a brief look at the possible policy implications of this study. A basic question that arises is: is high population growth bad for economic growth and human development? This is a fertile area of debate. Baland and Robinson (1996) point out, “The aggregate evidence about the effects of population growth on economic development is ambiguous. The empirical evidence, extensively surveyed by Kelley (1988), Birdsall (1988) and Robinson and Srinivasan (1996), is that there is no robust relationship between population growth and development one way or the other.”

“Since economists have not been able to construct a convincing rationale for the existence of a population problem on the basis of a specification of an intertemporal social welfare function, the search for the existence of a population problem has concentrated on the possibility that population growth might generate significant externalities or be connected with other market failures. Thus far neither the theoretical nor the empirical literature has reached a consensus on the issue” (Baland and Robinson, 1996).

“One common argument is that if all parents increase their families then the effect on labor supply will cause the wage rate to fall. As Willis (1987) showed, however, this effect is a pecuniary externality (in the terminology of Scitovsky (1954)) which does not imply inefficiency when markets are complete. While the assumption that markets are complete is clearly unrealistic, thus far a convincing synthesis of market incompleteness with population growth has not been made. In particular, it is far from clear that the

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second best policy intervention in such a world would be to attempt to restrict fertility. An alternative argument, studied by Nerlove et al. (1987) is that population growth may have adverse effects by crowding public goods and infrastructure, a counter argument being that a larger population reduces the average cost of provision. ... Recently there has been much interest in the issue of whether or not population growth has important externalities by causing rapid environmental degradation as in the model of Nerlove (1991). Indeed, the empirical evidence of Allen and Barnes (1985) and Cropper and Griffiths (1994) shows that population growth is positively related to deforestation. ... [But these issues are best handled by environment policy rather than by population policy]” (Baland and Robinson, 1996).

However, most policy makers still continue to believe that there is a significant population problem. It appears to me that there is a definite problem here, but that it is environmental rather than economic. There is no way that a particular species of animal can suddenly increase its population at the rate at which humans have done in the past hundred and fifty years without disturbing the delicate natural equilibrium in nature. Many species of natural life have come under great stress from this population growth. A Darwinian approach might treat this dominance by humans as a natural extension of intelligence of human beings; but there are tremendous risks to this untrammeled dominance, given the tendency in mankind toward opportunistic behavior and negative social and global externalities. It is this behavior that has resulted in the savage cutting down of forests, elimination of species, and a major burst of pollution. It is not know how nature, with its complex interactions, will interact to this tremendous change, coupled with economic growth. That is the primary concern, as I see, and steps must be consciously taken to bring back population to its equilibrium of replacement levels of population.

In other words, I believe that though an economic proof of the existence of a population problem is in question, we cannot neglect population policy till we officially ‘discover’ such a problem. The present study has implications for such population policy.

1.3 Evolution of the old age security motive

It is useful, in this introductory chapter, to lay down a possible story about the origin of the OASM. This would bring in the institutional framework which we wish to ultimately analyze.

When we look at the growth of animal populations on whom natural constraints have been lifted, we find that there is usually a sudden spurt in their population growth rates. Ultimately, they reach another constraint, and thereafter a new equilibrium sets in, which is almost a ‘steady state.’ Three shifts in equilibria of human populations have been identified by Easterlin (1996), who, following the methodology of Kuznets and others, has classified human economic-demographic experience into three epochs. The principal characteristics of these three epochs relevant to us, are given in Table 2.

Table 2: Distinctive Characteristics of Economic-Demographic Epochs

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Epoch I Epoch II Epoch III _ 1. Principle occupation Hunting Farming Diverse

gathering2. Principle type of settlement Nomadic Village Urban

3. a. Initial date of epoch - 8,000 B.C. 1750 A.D. b. Terminal date 8,000 B.C. 1750 A.D. ? c. Duration, years 2 million ? 9,750 247

4. a. Population at start - 7.5 770 b. Population at end 5-10 770 5,300 c. Years to double population 90,000 1,459 90

Source: Easterlin, 1996.Notes: Population is in millions.

We shall see how the age structure of the population has shifted inexorably toward the elderly, over these three successive equilibria. We shall therefore motivate the existence of an OASM which will then be shown to have possible effects on fertility.

1.3.1 The first equilibrium: Hunting and gathering epoch

Consider the epoch hunting and gathering epoch. During this period, human populations grew very slowly, doubling every 90,000 years. This slow growth in population can be characterized as an equilibrium very similar to that achieved by most animal societies: given the constraints of the environment, the populations of various species fluctuate around a relatively constant value. It has been hypothesized by some4 that in such primitive societies, people had children to the maximum extent possible, biologically. The biological maximum is about 15-17 children for a woman. This is also known as fecundity. It is extremely difficult, however, to come to such a conclusion.5 One would hypothesize that human beings have evolved a biological maximum of about 15 children as a response to crises: this capacity provides a primitive society with a reserve reproductive capacity: in usual situations, much lesser number of children were sufficient to enable the survival and even moderate expansion of the species; however, after natural checks decimated large populations, this ‘reserve’ capacity was utilized by women to repopulate their area within a relatively short time.6 Another argument could be that human fecundity might itself have evolved over the millions of years of pre-agricultural societies, adding to the complexity of the issue.

4 This is what Cipolla (1974) concludes: “primitive man … had a very high fertility.”5 More information on this subject will be subsequently collected.6 If the above thinking is true, the question arises: how were women able to control their fertility? Was this increase in fertility in response to negative shocks consciously planned? And if so, were there some deliberate contraceptive measures used during the ‘normal’ periods? This question is considered later.

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In such societies, the weak - i.e., the infirm and the old - were non-existent,7 as there were no means to transport them around while shifting from place to place. Since there were no old, there was no problem of old age security.8

1.3.2 Agricultural epoch

Then, suddenly, one constraint on human population was removed: by discovering agricultural production technology, humans were able to reduce the variance of their food supply and increase the survival rate of the population by overcoming possible death from starvation. This technology put a constraint on their mobility, however, forcing them towards a less nomadic lifestyle. Agriculture also necessitated cutting down forest areas, and increasing the ‘exposure’ of the peasant to wild animals. This exposure - which is frequently fatal even in the agricultural societies of many developing countries today - was minimized by the creation of villages communities where cooperative solutions to the problems of security and insurance were worked out. The size of the community could now be much larger than the small hunting and gathering groups. Norms of cooperation were developed initially to ensure the survival of children when their parents had gone to the fields. Coterminous with the to the creation of villages, property rights on land came into existence, and it became it became possible to ‘own’ assets, in howsoever primitive a way.

It is extremely rare in nature to find animals that live their natural life span. But now, for the first time in the history of human beings, the older members now began to survive in ever increasing numbers. The infirm and the old were able to receive positive externalities from the safety and cooperative spirit of the village. But getting this cooperation was not quite easy. Since most species do not live to old age, evolution can be thought of as not providing suitable ‘instincts’ to children to provide for care for the old.9 It therefore needed all the experience, intelligence, imagination, and guile10 of these old folks to create man-made rules and constraints (institutions) designed to ensure their extended survival. Thus arose the problem of old age security.

I would imagine that sympathy generated for the old and infirm by existing maternal instincts transferred over to this task to some extent. Also beneficent to the old are the psychological traits of humans whereby children tend to internalize much ‘obedience’ towards parents (transactions analysis literature, e.g., Harris, 1969). This

7 Summaries of various anthropological studies showing that most humans died a violent death, well below the age of 40, and that “The age of fifty [was] … rarely attained,” are described in Cipolla (1974:82). 8 This is not quite true: to have children might have been relevant to a middle-aged hunter who was no longer able to participate in the hunt, but only in food gathering. But we ignore this relatively minor possibility. 9 Since the old and infirm serve no evolutionary purpose, it is also unlikely that such ‘instincts’ will ever develop in the human species.10 We should recognize that guile might constitute only a very small component of this ‘engineering.’ Parents are driven so much by good will toward children that they would rather minimize their ‘claims’ from children to the extent possible (see Logan and Spitze, 1995).

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would have made it easier for parents to devise institutions intended to gain power for themselves and to get support when they were very old and infirm. But it would appear that this ability to free ride on the goodwill or obedience of children could not depend exclusively on the existence of charitable and altruistic individuals, just as the poor of today cannot depend on the charity of the rich. Therefore there came into existence an incentive to design institutions to create an assured mechanism of old age care. The following institutions were therefore designed by most village communities, motivated, surely, by the self-interest of all members, including the young - who could then utilize these institutions to further their own self interest when old.

a) The extended family. By this mechanism, the ‘portfolio’ of the household was diversified. The old were able to become ‘useful’ economic assets by providing child care to the extended family, and in return they could expect to get some attention to their needs. It did not matter whether the society was patriarchal or matriarchal: what mattered was that the elders gained increasing importance in the extended family, primarily by virtue of their experience in managing the young.

Sociological theory confirms this view. The development of the extended family is closely related to the development of an intergenerational role relationship, as pointed out by Entwisle and Winegarden. This approach goes beyond the economic value of children to parents; however, one can see an implicit argument about old age insurance in this approach. “This approach focuses on the expectation of support in old age rather than its economic value to parents. The expectation of old age support denotes an intergenerational role relationship that plays an important part in defining extended family structure. It includes the willingness of children to help their elderly parents as well as the extent to which parents are justified in expecting this help. Thus it provides the context in which the value of children is determined. The substitution of pension benefits for help from children is thought to weaken the strength of the intergenerational role relationship. Sociological theory posits that this shift in family structure is a crucial aspect of major and long-term fertility decline.”

b) ‘After-life’ concepts: Since the economic value provided by the old was extremely limited, the ever-present ‘mystery of death’ was utilized by the leaders among the old to promote the concept of ‘after-life.’11

i. Duty toward parents:

Consider a simple, infinitely repeated game. If I create a set of beliefs in my children about the existence of an after-life, then I can implant on them the concept of ‘duty toward old parents’ and other such concepts and impose the following rule: “Do good to your parents, else their ghost will haunt you not only in this life, but you will be 11 It is to be noted, however, that ‘after-life’ concepts were in existence much before the agricultural revolution.

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also punished in your after-life.” The existence of such beliefs will ensure a stable sequential equilibrium, wherein the old are supported in their old age by an off-the equilibrium path threat of strange retribution by the spirits. Even today, in most agricultural societies, ancestor worship is a major religious task. To this observation, one can add that this was the time when major religions sprang up all over the world, promoting the care of the infirm and weak, and attempting to ‘tame’ the violent nature of man evolved over the previous millions of years. Since everyone has occasion to be weak and infirm sometime in his or her life, religion became an extremely successful institution.

ii. Religious need for a living son:

In some societies, one of the relatively successful institutions which promoted care for the old was the promotion of a religious desire for a living son at the time of one’s death. The belief in after-life meant that parents had an incentive to have non-zero children, as well as the son had a fear of displeasing his parents. This can be modeled as a sequential decision making model (e.g., O’Hara and Brown, 1976) with the decision to have a marginal child being dependent on the outcome in the last period. These models seem to generate relatively interesting results, including a non-zero fertility. But there is no justification of why a living son is desired by a parent. That justification can now be arranged through the old age security motive.

c) Property rights and strategic bequests: In agricultural societies, it must have taken a lot of work to create and maintain property rights institutions. It is possible to imagine the formation of groups of powerful youth in a village, which, over time, as they grew older, created mechanisms to enforce property rights, and who ultimately became the typical ‘council of elders’ which administers justice in most agricultural societies. Once the property rights institutions were put into place, yet another mechanism came into existence for use by the old: that of bequests. If bequests were made ‘strategically,’ with only those who took better care of the old getting these bequests, then the old could ensure that the young had a further incentive to look after them, and were able to enhance the quality of this care.

Some societies built an even more grandiose edifice of man-made rules in order to ensure the success of old age security. The status of elder members of a society was enhanced successively over time in places like China. In other societies, norms were developed such that if a young person did not take care of his or her parents, that person would face ostracism from the village community.

Having designed these institutions, it now became feasible for a community to support old members until their natural death.

Old age security and fertility

Once such institutions had been established, and the probability of living out a complete natural life-cycle became a reality to be taken seriously, the utility of a child

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was enhanced, since there was now a ‘returns’ component to the ‘investment’ made in a child. Till now, i.e., in the hunting and gathering epoch, there was a uni-directional flow from the parent to the child (contrary to what Caldwell hypothesized), since the parent was sure never to reap the rewards of ‘care’ from his or her children. But with the new institutions put into place, bi-directional flows became a reality.

It is very difficult to say whether human beings became ‘rational’ utility maximizers at this stage (or whether they are even now), but it is safe to say that in whatever primitive ‘calculation’ that was made about a marginal child, a positive incentive was now built up: of a return from the child in terms of old age security. Therefore, parents had a stronger interest in the survival of their existing children, and also perhaps, in producing more children. This is the essence of the OASH, and this makes sense.

If the OASM was sufficiently strong, and the marginal value of a child was positive, then we would expect an even larger growth in population, approaching the biological limit of 15. But it is not clear is whether the TFR increased as a consequence of the OAS factor. That is because now there were many other constraints to be considered: On the supply side, there was lesser fear of children being eaten up by wild animals, and hence the mortality of children reduced considerably. Further, there was lesser fear of death due to starvation, which also increased the survival of the children. On the demand side too, there were some opposing tendencies. (a) It is not obvious that the marginal value of a child needs to be positive to have this relationship between old age security and fertility,12 and if so, there is a natural trade-off between the increasing costs of an extra child and the insurance benefits expected from that child. (b) Marginal costs of children can be argued to be increasing. Limitations on land, given the production technology, could reduce the productivity of the farm, thus making the extra child more costly. (c) There is an associated problem of free riding by children. If there are too many children, then each child will expect the other one to look after the parents in old age, thus reducing the marginal return from the extra child. (d) Certain social norms might also restrict the return from children, for example, the institution of primogeniture, which was designed to prevent fragmentation of holdings, but which could reduce the effectiveness of strategic bequests.

Consequently, the net effects of the OASM on the TFR are ambiguous. But that does not matter. It is not necessary to demonstrate a very high TFR in order to include the effect of the old age security motive on fertility. Even if TFR remained the same as in the hunting and gathering epoch, it can be argued that the old age security motive had an influence on not reducing the fertility rates. Be that as it may, at the commencement of the fertility transition all over the world, TFRs were in the range of 6-8 in almost all societies of the world, and life expectancy ranged between 20-30. According to Preston,13

“Most of these records suggest that life expectancy from prehistoric times until 1400 or so was in the range of 20-30 years. … Confidence in the range of 20-30 for life

12 Since the parent is primarily concerned with the insurance component of care by his children.13 Preston, Samuel H. “Human Mortality Throughout History and Prehistory,” in The State of Humanity, in vol. 3 of readings of ECON 523 by Easterlin. Get the exact reference.

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expectancy in the era before 1600 is enhanced by the use of demographic models. Since the world’s population was growing very slowly during this period [doubling approximately in every 1400 years], life expectancy at birth was, to a very close approximation, the reciprocal of the birth rate. Given the age pattern of fecundity and the apparent absence of significant anti-natal practices, the birth rate was quite unlikely to have fallen outside the range of 0.33-0.50 births per capita per year, implying life expectancies in the range of 20-30 years.” These estimates are in line with those in Table 2. With greater survival of the children and the old, human population growth received a big boost. It now became possible to double the population within 1459 years (the World Bank, 1993:8, has estimated a growth rate of 0.06 percent in the past two thousand years). This new equilibrium growth rate was however, not permitted to continue for long, and received another technology shock.

1.3.3 Epoch of Modern Economic Growth and the mortality revolution

With the onset of the technology of public hygiene and modern medicine, the mortality revolution, dating from about the end of the 19th century, took place.14 It was now possible for an even larger number of children to survive into adulthood. A disequilibrium was created in the population of the world. Since the recent “habit” of having 6-8 children did not change instantly, the accompanying mortality revolution led to a sudden explosion in the growth rates of population, both in the European nations,15 and more so in the developing nations. The recent enhancements in the technology of medicine have given a major boost to the life expectancy of the elderly. So, now we have even more elderly than ever before in the world (see Box 1).

Box 1 Unprecedented increase in numbers of the old

* “In 1990, almost half a billion people, slightly more than 9 percent of the world’s population, were over 60 years old. By 2030, that number will triple to 1.4 billion. Most of this growth will take place in developing countries, over half of it in Asia” (World Bank, 1994a).

14 We do not consider the industrial revolution as having played a significant role in this increase in population. For details, see Preston (1975) and Easterlin (1996).15 As per the Encyclopedia Britannica Online, between 1800 and 1936, the number of people in Italy and Germany nearly trebled, and in the United Kingdom and the Netherlands the population nearly quadrupled. This excludes the emigration from these nations to Australia and to the USA.

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* “Because of the broad diffusion of medical knowledge and declining fertility, developing countries are aging much faster than the industrial countries did. In Belgium, it took more than 100 years for the share of the population over 60 to double from 9 to 18 percent. In China, that transition will take only 34 years, and in Venezuela, 22. Developing countries will thus have “old” demographic profiles at much lower levels of per capita income than the industrial nations” (World Bank, 1994a).

* Life expectancies everywhere have increased dramatically in the past fifty years.

* “Of the 300 million people above the age of 60, only 20 percent have any form of income security” (UNDP, 1993:12).

* Most parents surveyed in most developing nations still talk of support from children as constituting a major part of their expectation for old age security (result of many surveys).

It can be expected that the human race will once again establish an equilibrium, in which the population will once again grow at a small but stable rate, but establishing this equilibrium could take till about the end of the 21st century for the entire human race to arrive at (Wilson, 1975:574). Whatever be the equilibrium, it is clear that it will include a much greater proportion of the old than in the agricultural epoch.

In the meanwhile, the question that interests us, is: now that people can expect much greater life expectancies, what is the effect of their desire for old age security on fertility? To analyze this, broadly, we note that in the first place, in most societies, the industrial revolution preceded the mortality revolution. The increase in incomes consequent to the onset of modern economic growth has meant that parents are more capable of supporting the increased number of surviving children, at least in most cases. At the same time, there are now other factors which increase the costs of children. Children have become costlier to ‘rear’ than in agricultural societies human capital development in modern societies requires very high investment in education of the children, which increases direct costs (on books, etc.) while at the same time reducing benefits (child labor benefits). Migration to urban areas also increases the probability of default (in old age care) by children, while at the same time diversifying the ‘portfolio.’ When we examine the three major institutions designed in the agricultural period to cater to the newly developed need of ‘old age security,’ we observe that in the modern period, the first two are breaking down considerably, viz., the extended family and the belief in after-life. The third institution, viz., the institution of strategic bequests, is also breaking down, with the promulgation of laws in many nations which prevent discrimination between offspring in the distribution of bequests. Therefore the old have difficulty in guaranteeing the returns from children.

In the situation of tremendous flux in incomes, costs, and institutions, observed over the last 100 years - and particularly in the past 50 years in the developing nations, it is very difficult to arrive at a clear effect of the old age security motive on fertility. All that can be seen is that the problem of old age security is being mitigated by increasing

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incomes while at the same time it is being increased by the collapse of the traditional institutions while others have not yet been designed, tested and established. The commonly proposed solution to this problem is to enhance government social security programs. But these programs are not only very costly to implement, but wherever implemented so far, have run into trouble in terms of management and finances. Therefore, today, some of the best economists, sociologists, and psychologists of the world, are trying to find out a solution to this ever increasing problem of old age security.16

It has been hypothesized in the literature from a very long time that despite the strong economic incentives to reduce the number of children consequent to the changing environment of the modern epoch, and despite the breakdown of the three institutions cited above, one major reason why fertility decline has not been rapid enough is because people see no immediate solution to their problem of old age security but to have more children than would have been otherwise necessary. If this were to hold true, then, policy makers would need to devise a new institutional mechanism that takes care of this concern, assuming that this sudden disequilibrium in population is deleterious to the society and environment.17 In any case, the problem of old age security is very real, and needs to be solved sooner or later. We shall however, not concern ourselves with the solution to the problem, but with the hypothesized effect of the problem of old age security on fertility.

16 For example, the World Bank is currently running a major project on social security programs designed to cater to such populations. 17 This issue of increasing population imposing net marginal social costs, is of course, open to debate, as Easterlin (1996) and Simon - in his various books - argue.

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Chapter 2A Superstructure of Theory

Two noticeable phenomena need to be explained: (a) the decline in fertility and the differential decline in fertility across nations and (b) the tendency for fertility not to decline much below 2.0. All theories of fertility that are entirely endogenous must explain both phenomenon.

This chapter is based primarily on a survey of literature, but one’s own understanding of this literature is also highlighted. In section 2.0, we discuss the functioning of the human mind with the intention of framing a structure for modeling. Section 2.1 examines the explanations for the fertility transition. Section 2.2 looks at the reasons for the observed lower limit on human fertility. Section 2.3 examines the relationship between old age security and fertility.

2.0 The complex puzzle of human fertility

Human fertility has interested economists since Malthus (1798, reprinted, 1976). In order to evaluate the theories which seek to explain this change, we must first consider some basic mechanisms of human decision making in relation to children. What we see is a black box and we must deduce the behavior from the outcomes.

Figure 1: The Black Box of Human Reproduction

Human beings à black box à decision to reproduce à child (with certain probability)

We begin with the basics. First of all we need to determine whether the of birth is outcome completely random or do human beings take a conscious decision to have a child.

2.0.1 Was fertility in pre-transition societies ‘deliberately controlled,’ i.e., determined by humans?

There is a huge debate in the literature about the ability and desire of humans to invoke deliberate control of fertility in pre-transition societies.

1. Evidence and arguments in favor of lack of deliberate control:

a) Humans, being derived from the rest of the animals, do not ‘choose’ their fertility:

While this is not the common argument given by authors who advocate lack of deliberate control, it must have been true that at least at some point in the past,

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homo sapiens did not choose their fertility: perhaps in the pre-agricultural epoch. We have already incorporated this component in the EEF, discussed above.

b) Pre-transition people refer to children as gifts from God:

As recently as in 1993, Pollack and Watkins found, while interviewing a woman in Mali who had heard about the contraceptive pill but had not used it, that she considered that “It’s God that gives me children, since it is God that gives or not. You can’t make a choice about children.” These kind of statements, taken at face value, would imply that the observed fertility of in most pre-transition societies was the actual fertility that an average woman would attain. The report on the Matlab experiment by Koenig et al (1992: 358) also mentions that in the comparison area, in 1975, as many as 27.1% of the respondents attributed the family size to “God.”

c) Coale’s m index: No evidence of deliberate fertility control:

Easterlin, et al. (1980) argue that “If reproductive behavior is a matter of deliberate choice, then one would expect to find evidence of deliberate practice of fertility control. In fact, the evidence points to the general absence, rather than presence, of deliberate fertility control in less developed countries. The evidence available is of two types - survey data in which households report on their knowledge and use of fertility control, and census or other data on age-specific marital fertility rates.” In this regard, the index of fertility control, “m,” developed by Coale, et al. (1974) shows that there was no conscious decision making in favor of fertility control in the pre-transition societies.

d) Even if there was control of fertility, it was not based on choices by individuals:

According to Bourgeois-Pichat (1967), “Fertility in preindustrialized societies seems to be strongly determined if not controlled in the sense we give this word today. It is determined by a network of sociological and biological factors and when the network is known, the result can be predicted. Freedom of choice by couples is almost absent. The couples have the number of children that biology and society decide to give them” [italics mine]. Leibenstein (1980) also argues that “there are a wide variety of social controls of population even in developing countries, and furthermore, that the social controls are substitutes for private controls.”

Demeny (1991) also believes that “For fertility we had for a long while a lot of customs carefully molded in the course of time which almost completely determined the size of families. These customs are still there but they are for the most part useless, as fertility is now under the will of the people.”

Easterlin (1996) admits the existence of these ‘social’ and other “controls” (such as breast-feeding), but draws our attention to the fact that these “controls” are

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completely inadvertent (unintended). In other words, decisions regarding these “controls” are not taken with the intention of reducing fertility, but with other intentions. He cites surveys which show that people often attribute exactly the opposite effect on fertility to some of these behaviors than their real effect.

2. Evidence and arguments in favor of deliberate control:

a) Pre-transitional fertility is lower than the Hutterite:

This argument bases its finding on the fertility of Hutterites, a small religious community in USA. The Hutterites view fertility regulation as sinful and high fertility as a blessing. The consequence is that their fertility is extremely high, approaching 10 children per woman.18 Now, in the absence of evidence showing that Hutterite women and children were particularly blessed with good health and energy, it must be concluded that pre-transition societies practiced some form of control to achieve TFRs between 6 and 8.

Abernethy (1993) believes that human beings did restrict their fertility in most societies to about seven children. The problem of excess population was curbed through various pre-modern socially-sanctioned methods of limiting the fertility. These included sexual abstinence supported by superstition and taboo, legal and cultural restrictions on marriage, polygyny, prostitution, primogeniture, ultimogeniture, infibulation in the female or subincision in the male, abortion by primitive methods, prolonged lactation, infanticide, and the depersonalization or killing of widows. There are about 30 such methods listed by her.

b) If people really wanted to control fertility, they could have done it:

Demeny (1991) states that “It would be utterly condescending, indeed absurd, to propose that populations in developing countries, had they strongly wished to achieve low fertility, would have been incapable or unable to do so, would have been unwilling or unable to adopt some variant of the same methods of fertility control that have proved effective, as measured on the aggregate level, in the West [prior to the fertility revolution].”

This argument can be justified as follows. If a couple is modeled as an ‘agent’ of ‘society,’ and is expected to produce a certain number of children, but the society is unable to observe the actual act of procreation, then couples can plead sterility, health problems, etc., to the society, if they do not want that extra child. Given that opportunism and bounded rationality exists, it is relatively easy for a couple - that does not want more children - to cheat their elders and pretend helplessness about not having more than two or three children. On the other hand, it is very expensive for the elders to formulate a contract with the children that will overcome this opportunism.

18 Encyclopedia Britannica online.

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c) Economic models have considerable predictive power:

The argument in favor of a certain degree of control is clinched when we consider that models of fertility based on demand and supply as well as economic considerations have good predictive power. Anyone who claims that people were not influenced by economic reasons and therefore able to make conscious choices earlier, will have to show what changed in the constitution of human beings in the past fifty years to cause economic factors to influence fertility. In other words, why did fertility suddenly became amenable to human decision making.

d) Rational peasants:

There is a tendency in the literature to assign an excessive importance to formal education in demarcating the transition between irratioanal and rational peasants. For example, Robinson (1980) believes that “there is abundant room for skepticism about the usefulness of the same model with the same assumptions in both developed, literate concepting populations and less-developed populations with excess demand for children.” On the other hand, the non-believers in the rationality of peasants should take a look at the new institutional economics literature which shows how peasants have rationally solved various problems of insurance and credit, as in the case of share-cropping. This literature shows that illiterate, poor peasants have behaved extremely rationally in the past. There is therefore no reason to believe that peasants will behave irrationally with regard to their fertility decisions. The OASH is a step forward in this direction, in that it gives the peasants a capability to be rational, which has been disallowed to them by many other economists.

e) No biological change in the transition period:

The most convincing reason in favor of supposing deliberate ‘planning’ if not control, of fertility in pre-transition societies, is that there has been no sudden observed change in human biology or human nature in the past fifty to a hundred years. Therefore, if people are supposed to be capable of deliberate control of fertility at this stage, then there is no reason why they were not capable of such control in pre-transition societies. The only sensible explanation for the behavior of mankind prior to the pre-transition societies is that they had deliberately and consciously arrived at the number of 6-8 children per woman since that was the only way by which they would assure at least the reproduction and renewal of the race, given the high casualities along the way. People who think that a TFR of 6-8 in pre-transition societies was in any way high are completely mistaken. Less than that might have meant the extinction of the human species.

Therefore, one supports the argument that if human beings can take rational decisions on fertility now, there is no reason to believe that they did not take such decisions earlier, and that the observed TFR of 6-7 children in pre-transition societies

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was a personal optimum - or perhaps a satisficing19 number. The only way to test this is to see if the same model can predict the TFR in both pre- and post- transition societies.

2.0.2 Do we model this decision as “strictly rational” or “boundedly rational?”

Assuming that we decide that human behavior can be characterized as being rational in both the pre- and post- transitional period, a question arises: whether the decision is rational in the sense used in modern economics, or whether people are merely “satisficing” and thus “overshooting” or “undershooting” because of bounded rationality and imperfect foresight.

1. Implications of the rational decision making process: If human beings are perfectly rational, then they would have the comprehensive ability to optimize their infinite lifetime20 utility over a budget set, by forming rational expectations. Under this view, it can be shown that if producing children does not impose externalities on others, then the outcome of any number of children chosen by parents, is Pareto optimal.21 If there are negative externalities and the outcome is not Pareto optimal, the outcome would be at least a Nash equilibrium22 and we might not reach a Pareto dominant situation in the absence of coordination.23 However, perfect monitoring and perfect intervention would ensure that we reach a Pareto dominating solution. If people are modeled as being perfectly rational, then the question boils down to finding out whether an existing solution is Pareto optimal or not, and if not, how to shift the outcome towards a social optimum.

A weaker version of this argument, which is quite difficult to distinguish from perfect rationality, is modeling people as selectively rational. In such a model, (proposed by Leibenstein, 1978), it is sufficient to assume that the marginal behavior is rational, and in particular that the starting and the stopping points in having children is rational.

2. Implications of bounded rationality: If human beings are thought to be not capable of working out an optimal solution given the various constraints of time, information, and capability that they face, then they are boundedly rational wherein the solution is at best, a satisficing one, i.e., the outcome might not be strictly optimal: on the other hand is it not a random outcome nor an irrational one. Boundedly rational utility maximizers might overshoot or undershoot the number of children they produce. Another aspect is learning by doing, that might lead ultimately to a rational solution, but with a lag.

19 We use the term satisficing in the sense used by Herbert Simon, to represent an approximately optimal solution.20 Which can often be visualized as the utility over infinite overlapping generations.21 This point is discussed in Baland and Robinson (1996).22 The number of children I produce maximizes my utility given that I know the equilibrium outcomes of everyone else. 23 An example of coordination in the field of fertility would be the method of monitoring of each woman’s menstrual cycle in China.

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It is more convincing to argue that the individual decision to have children is boundedly rational. On the other hand, if we assume that the mis-conceptions and over-shooting of different individuals cancel out in the aggregate, then a good approximation can be made by rational decision making. If however, there are waves of optimism or pessimism (as took place in the Great Depression or after the World War II), akin to speculative bubbles, then there could be consistent biases away from the individually optimal solution for some duration of time. But on the whole, a rational decision making model should be able to capture most of the change in fertility. Therefore we shall model rational decision making and then allow for a margin of error in the observed outcomes. If possible, at a later stage, one would like to incorporate a fuzzy logic model to try to capture the bounded rationality of the decision.

2.0.3 Does the utility function change? Role of family planning messages

A simple model of changing fertility would be to allow the utility function to change (not just shift). Leibenstein (1980) believes that there is at least some component of decision making which is evolutionary, in which decision making becomes increasingly rational as modernization progresses. In the context of fertility, Inkeles (1969) examined the characteristics of the personality of a modern man, an important one of which was “attempting to control births.” This was seen as an outcome of greater independence of decision making. There is thus an entire set of properties of ‘modern man’ which are reflected in these shifting preferences. This aspect also takes into account the strength of the motivation to change, including the desire to ‘convert’ others to their new viewpoint.

Similarly, Pritchett and Summers (1994) and many others believe that one of the consequences of increased levels of education is to cause preferences to change toward lower number of children, other things remaining the same. Rutstein (1995), however, empirically finds that women’s education is not critical to this change in preferences. As a consequence of modernization, attributed to shift in the “attitudes current in society,” a large shift seems to occur in the preferences even of uneducated women. Rutstein (1995) has systematically examined this issue and believes that “family planning programs do more than just act as passive providers of access to contraception… Through increased contacts with persons using contraception, gains in knowledge about contraception and legitimization of the expression of small family values and the use of contraception, through the mass media, cohort experience and official policy, family planning programs actively affect the fertility desires of couples”(italics mine). The World Bank (1993) also seems to believe in the efficacy of family planning messages in changing preferences at least to some extent: hence the emphasis on quality of the family planning programs.

Nabli and Nugent (1989) admit the possibility of deliberately changing the preferences of people. In the context of institutional change and development, they mention, that “[e]nhancing some preferences or changing them may have an effect similar to that of setting norms or rules in helping to resolve free-rider problems and reducing transaction costs” [emphasis added]. Kuran (1995) allows for such change and in fact, models such changes in preferences. While not completely relevant to the field of

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fertility, Easterlin and Crimmins (1991) have provided evidence, based on time series analysis, that “material aspirations increase over time with the level of income,” or, in other words, that “real income is being deflated by rising material aspirations” (Easterlin, 1996). What we want to note from here is the feasibility of the utility function itself changing over generations. Easterlin (1996: chapter 10) also talks about how the socialization of people shapes the way their tastes develop. According to Landes (1990), “Values are an especially thorny problem for would-be developers … Values and attitudes do change, but slowly, and their force and influence vary with circumstances. Many religious values operate, for instance, to impede the mobility and openness conducive to efficient allocation of resources and rational economic behavior.”

Therefore, using these very persuasive arguments, it is quite plausible that fertility in Thailand has declined rapidly compared to Costa Rica simply because a rapid change took place in the preferences for children. But such an explanation fails to tell us why this rapid change took place in Thailand and not in Costa Rica. Further, the analysis not only becomes tautological, but also nearly intractable. Therefore, most neo-classical economists object to such an analysis, and Stigler and Becker (1977) even wrote that “De gustibus non est disputandum,” or “tastes are not to be disputed,” wherein they proposed a strictly ‘rational’ methodology for dealing with many issues of non-economic human behavior. Using their methodology, we can think of children as representing two commodities: “success in transmission of genes” and “care in old age.” Conflicts can arise between the consumption of these two commodities, such as when an agent is old and his son is wealthy but the son does not take care of the agent. In such a situation, the agent will have the satisfaction of seeing his genes carried forward to the future, successfully, but will have the dissatisfaction of his son not taking care of him.

There is clearly a substitution between these two utilities, as can be shown by an example from West (1997). Elders of the Sumo Association, who are themselves retired sumo wrestlers, are required to sell their share in the Association by the time they turn 65. Usually, this share is sold to a top ranking wrestler who can afford the high price of this share. But if the wrestler marries the elder’s daughter, then the price of the share is considerably lowered. This can be interpreted as a substitution between the above two needs. When the future success of an agent’s genes (through his daughter and her progeny) is assured, then the agent is willing to forego a little of the old age care motive which would have been fulfilled with earnings from the sale of the share at its market value.

It is worth noting here that neo-classical economics did not begin with such a strict interpretation of human preferences. “In his Principles, Book III, ‘On Wants and Their Satisfaction,’ Marshall begins Chapter 2 by taking an anthropological view of the development of ‘wants’ or tastes. Those of the savage are few; those of civilized man become increasingly complex, varied, and subtle with the passage of time and institutional development” (Klein, 1994). This implies a changing utility function. Unfortunatel, by the next chapter, Marshall decided to keep taste constant while analyzing demand.

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The key problem, I perceive, is not that economists do not recognize that preferences can change, particularly across generations, but that there are no mathematical tools available to model this change. Also, there is very little predictive power from such a model. Therefore, we too shall restrict our attention to neo-classical models in which the utility function is kept constant.

2.0.4 Is the utility function of various individuals inter-related?

It is also possible to assume that the utility functions of each individual is inter-dependent on that of others. Therefore, the effect of social norms and pressures is extremely high in such cases. In such a situation, it is possible to have a ‘critical mass’ of opinion which is sufficient to enable a change in the preferences of all individuals at the same time. These changing attitudes can be modeled as per Granovetter (1978) or Kuran (1995). This aspect was initially touched upon by Duesnberry (1949), whose argument was taken further by Leibenstein (1950) who then showed the existence of bandwagon effects, such as those observed in fashion. Further, advertising and even the mere exposure to a particular good, is able to alter tastes.

2.1 Decline in fertility

To explain the observed decline in fertility we go by the synthesis theory of Easterlin which seems to provide a viable, broad framework. The other, highly mathematical modeling approach, is taken by the human capital school of economics, started by Becker. We shall touch upon certain issues arising from that school, in due course. We begin by discussing the complex puzzle of human fertility.

2.1.1 A basic neo-classical framework

In the standard neo-classical framework, we keep the utility function fixed and analyze the change in incentives, through an analysis of factors affecting the supply and demand for children.

Classification of the determinants of fertility

The earliest classification of factors affecting fertility was made by Kingsley Davis and Judith Blake (1956). Bongaarts (1978) called those factors which have a direct and immediate (biological) bearing on fertility as proximate determinants of fertility. These are combinations of biological and behavioral characteristics that determine fertility, and include24 (a) entry into marriage or sexual union, (b) contraceptive prevalence and effectiveness, (c) induced abortion, (d) postpartum infecundability, (e) the frequencey of intercourse, (g) the waiting time to conception, and (h) intrauterine mortality.25 24 From World Bank, 1993: 88.25 The first such listing was very simple, by Malthus, who merely listed two primitive variables, the age at marriage and the frequency of coition during marriage - the assumption being made, obviously that people would achieve their maximum reproductive potential, and that there was no practice of

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These determinants are to be distinguished from the basic or “true” determinants which refer to the “behind the scenes” determinants, such as education, urbanization, cultural factors, psychological and environmental factors. The old age security motive would be one such “true” determinant. It is believed that apart from the proximate determinants - some of which have changed over time, it is the basic determinants that throw more light on variations in fertility in pre-transition societies.

Easterlin has demonstrated the mechanism through which these determinants operate (from Chapter 15, on Modernization and Fertility, of a book by Easterlin):

Figure 2: Modernization and Fertility: Evolving Approaches

I. Multivariate regression on basic determinants

Basic determinants Children ever born

II. Proximate determinants (Bongaarts)

Basic Proximate Children ever born.determinants determinants

III. Synthesis framework (Easterlin: discussed below)

Basic RC, Cd, Cn Proximate Children ever born.determinants determinants

The supply-demand, economic-social-biological twin “Synthesis”

Easterlin (1978)26 created a channel through which the basic determinants operate. In his model, Cd represents demand for children and Cs the supply of children, then simply speaking, given certain preferences,

Cd = f (income, costs of rearing children, benefits from children)27

Cs = f(natural fertility of the couple, chances of survival of children born to the couple)

RC = costs of regulating fertility

contraception (Becker, 1960).26 Other contributors have been: Bulatao and Lee (1983), Easterlin and Crimmins (1985).27 This variable is approximated empirically by survey responses on desired family size (Easterlin, 1996).

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A situation like Cs - Cd represents an excess supply of children over the number demanded. If the present value of the psychic costs (over a lifetime) of this excess supply are greater than the psychic costs of fertility regulation, i.e., ³ RC, then parents will prefer to go in for fertility control.

Therefore, the chain of linkages as visualized by this model is:

Figure 3: The chain of linkage of the synthesis model

Step 1

Reduction in demand + Increase in ® Increased demand forfor children supply of children contraception(economic/social) (mortality revolution)

Step 2

Increased demand for + Lower costs of ® Rapid decline in contraception contraception fertility

(family planning)

This model explains somewhat more than this. There is an intermediate step where there is in fact an increase in fertility. This is attributable to the fact that with the onset of the mortality revolution parents have lesser disease, and are able to have more children. But soon enough this “hump” disappears as parents find they have an excess supply of children.

Easterlin tried to operationalize this framework in Easterlin and Crimmins (1981).28 The World Fertility Survey utilized this theoretical framework.29 This synthesis model - also called the Pennsylvania school model, was formalized for the first time in a utility maximizing framework in Easterlin et al. (1980). Unfortunately, as Sanderson (1980) pointed out, the formal model led to rather ambiguous results. We therefore do not consider this model in greater detail here, but the basic thrust of the model would be kept in mind.

The question which naturally arises is: which of these sides, the supply side, or the demand side, is more significant in terms of explaining the changes observed in fertility over the past two hundred years?

Supply factors: [Potential family size, Cn]

We begin by an analysis of the changes that might have taken place in the supply side in the past one hundred years or so (and in the more recent past in the developing nations).

28 Sanderson (1980) and Billsborrow and Guilke (1987) have written about the weaknesses of this model, as pointed out by Nugent and Anker (1990).29 Bulatao and Lee (1983) and United Nations (1987) reported on this Survey.

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a) Biological change: There is no reason to believe that natural fertility of couples has changed over the past hundred years.

b) Excess supply of children: As a result of the mortality revolution, commencing in around the end of the 19th century, child survival has increased dramatically. There has therefore been a sudden “excess” supply of children. But there is a limit to this explanation in terms of explaining the decline in fertility. Take the case of Thailand, in particular. Here, the under-five mortality rate has dropped from 149 in 1960 to 35 in 1989.30 This represents a 13.4% increase in the supply of children.31 Thismeans that the TFR should have declined by about 15% (or even 25%, if parents are assumed to be extremely risk averse) from 6.29 in 1964-5 to about 4.7 now in 1990. In fact, the 1990 TFR was estimated to be 2.4.32 Therefore, it the act of bringing down fertility by three full children would require a much stronger justification than can be offered by the supply side.

c) Confidence in the survival of children: Supporting the decline in infant mortality, as the quality of care of mothers improves and the density of public health institutions increases, a credible warranty would be established regarding the survival of children, and cause a diminution in the need to have excessive number of children as an insurance against loss. Again, this seems to be inadequate in explaining why the observed declines have been so rapid.

Most researchers have focused on the importance of the supply side, where changes in technology can be shown to correlate strongly with fertility declines.

Demand factors: [Desired family size, Cd]

Since the supply side explanation, taken in isolation, leads to lower declines in fertility than those actually observed, there must have been changes taking place in the demand for children.

a) Biological change: This explanation can be ruled out. There is no reason to believe that anything dramatic has happened to human biology in the past hundred years to cause a lower demand.

b) Social change: On the social front, two basic changes have taken place.

Education: Easterlin shows how education tends to raise the cost of children and shifts demand away from children. In particular, as women become better educated, their labor market opportunities increase, and the opportunity cost of children becomes very high. As a consequence of

30 Human Development Report, 1991, p. 126.31 (965-851)/ 851.32 Human Development Report, 1991,p. 160.

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increased education, the mean age of marriage of women has been increasing, too, acting directly on the proximate determinant of fertility. 33

Women’s status: A direct consequence of enhanced human capital is (a) the growth of the scientific attitude and (b) the ability to reason independently. A natural consequence of these abilities has been the ability of women to increase their status in society. As women’s role in decision making increases, they begin to look at the aspects of equal sharing of responsibility for child-rearing, and this makes for a tendency to have lesser children. In fact, “Demographic data from around the globe affirm that improvements in women’s status and in general living standards are keys to reductions in population growth” (Hartmann, 1995).

c) Change in expected net revenue (arising from old age security motive): According to Caldwell (1976) there has been a shift in the net present value (NPV) of a child from positive to negative after the onset of modernization. This issue is directly related the OASH in the sense that if people find that they are not likely to gain a positive revenue from children over their lifetime, then the demand for children will decline. The problem with this argument is that empirically it has been difficult to validate the Caldwell hypothesis, and at the same time, there is no very good theoretical reason advanced why this change in revenue should occur.

One possible reason advanced is that as parents see the positive outcomes of investment in human capital and declining infant mortality, they would concentrate on the quality of upbringing of their children, and not on the quantity of the children, thus reducing the demand for children34 (This explanation was proposed by Becker (1960) and elaborated by Willis (1974). This explanation has been critiqued by Schultz (1981: 3) on the ground that while empirically there does seem to be a trade-off between quality and quantity, there is no theoretical reason to prescribe this substitutability.

We shall dwell much more on this demand factor in the dissertation.

d) Economic growth and urbanization: The price line facing the individual has shifted against children:

Though touched upon earlier, in the context of the opportunity cost of women, it is true that increasing incomes have affected the opportunity costs of everybody and hence shifted the price line against children.

33 There is considerable debate in the literature, however, about the relevance of this change in the mean age of marriage in explaining the changes in fertility. In the case of India, it appears that this factor does not correlate with changing fertility (Cassen, 1978).34 There is an interesting literature (starting from Lucas, 1988) which shows that private individuals will not find it in their interest to invest in human capital as is socially optimal since they would not reap the externalities of this education. However, when the reciprocity motive is introduced, it should be possible to show that parents would reap these externalities, and therefore optimally invest in human capital.

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Modern economic growth is characterized by increasing urbanization. This has meant that children living in urban areas are unable to work part time in economically remunerative activities as children do in rural areas. This adds to the cost of children.

e) Child labor laws: Child labor has been made illegal in most countries. This has added to the cost of children even in rural areas.

Cost of fertility regulation (RC)

The costs of fertility control can be psychic as well as economic. The psychic costs are influenced by the culture or tradition of the society. It is virtually impossible to quantify these costs. It can be said, however, that with increasing education, the psychological barriers against contraception are breaking down and these costs are perhaps decreasing. The other costs are the economic costs of contraceptive devices/ procedures. As technology has improved and the supply of contraceptives become heavily subsidized - particularly in developing nations, the economic cost of fertility control has tended to decline. It is here that the family planning programs have played a very important role. The results of the famous Matlab experiment (Koenig, et al 1992) showed how a reduction of RC can reduce fertility. If there is a large unmet need in a society, then RC might be barrier facing the decline in fertility. In such cases (as explored by the Matlab experiment), the causality of Figure 3 can be turned around as in Figure 4:

Figure 4: Significance of the costs of contraception: the Matlab viewpoint

Lower costs of ® Increased demand forcontraception contraception(family planning)

Increased demand ® Rapid decline infor contraception fertility (proximate determinant)

While the slow growth rates of population in the agricultural epoch do not quite justify this argument, there is a widely held view which believes that there has always been a latent demand for contraception in the human species, which was not fulfilled till the arrival of modern contraception. The moment human beings were brought in the presence of essentially costless modern contraceptives, they began to use them. The argument would sound plausible only if it gave sufficient reasons for the existence of such an unmet need. In the Matlab experiment, it was perhaps the intervention of the nurses and doctors in health and other education, that brought about awareness of alternative lifestyles with lesser number of children, and hence created the unmet need which was found in the Matlab area of Bangladesh.

Economists are generally uncomfortable with this argument of widespread unmet needs. Leibenstein (1978) shows how “many of the countries that achieved their fertility

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decline earlier did so prior to the widespread distribution of modern contraceptive practices.”35 Also, as Pritchett (1994) has pointed out that “even costless availability of contraception would not drive down ‘unmet need’ very far, a point confirmed by the existence of substantial ‘unmet need’ even in countries with excellent contraceptive access.” They therefore discount the role of RC, and cite evidence that its was not the lack of availability of alterative means of contraception that kept fertility to relatively high levels but the higher demand for children. One would tend to support this view. The essential causes of the fertility decline have been changes in the demand and supply side. While definitely facilitating fertility decline, modern contraception cannot be cited as a major cause of this decline.

It is also possible that there are other effects of family planning publicity, for example, a change in the utility function. There is reason to believe that a common villager is not merely a wealth-maximizing individual, but gives ‘honor’ a considerable weight too.36 If honor is included in the utility function, we could have a situation where the promotion of family planning programs by respected individuals can cerate a bandwagon effect in favor of low fertility. In Costa Rica, since the catholic norms gives greater ‘honor’ or respect to having less abortions, there is less incentive to reduce the number of children, whereas in Thailand, such constraints presumably do not bind, and once a bandwagon has been created in favor of two children in a family, people would be forced to abide by the social norm since they care about the respect and reputation they command in society.

Extension of the Synthesis framework

The neo-classical synthesis framework of Easterlin thus possesses the ability to accommodate various aspects of change in supply and demand. On the other hand, its limitations are that it is too general, and therefore its predictive power is limited, apart from pointing out the general direction of trends. There are aspects of decision making which are better modeled using a strict household model on the lines of Becker and Cigno, etc. Further, it does not take into account the macro and community level variables appropriately.

Therefore, two extensions of this framework have been considered in the literature:

a) Incorporation of macro and community level variables: Recent studies37 have included macro and community-level variables into the framework. The idea behind this is that community-level institutions, opportunities, environment and values impact the fertility decision of the individual. The demand for children can be rather strongly influenced by these factors in the context of specific motives,

35 Also, Pritchett (1994) and Paul Demeny cited in Piel (1995).36 In the analysis of institutions, Lin and Nugent (1995: 2338) show how a ruler can have variables like prestige, position in history, etc., apart from wealth or consumption, and therefore there could exist substitutability between these variables.37 For example, Anker and Anker (1982), Bilsborrow and Guilkey (1987), and Casterline (1987).

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such as the old age security motive. In this case, we must consider, for example, the availability and accessibility of capital and insurance markets, the stability and real rates of return in such markets, sources of risk and uncertainty such as floods and drought, and so on. (Nugent and Anker, 1990).

b) Relaxation of the assumption of unified, homogeneous household: Recent models38 have also added to the richness of analysis by allowing for differences between husbands and wives in both the number of children they would like to have as well as their relative abilities to achieve this desired family size. Again, in the context of the analysis of the old age security motive, this extension gains considerable importance, since there are grounds to believe that “men and women display differences both in strategic behavior with respect to achieving old age security and in the role they perceive that children should play in this” (Nugent and Anker, 1990).

A diagrammatic illustration of the flow of causality among relevant variables in the extended versions of the supply-demand synthesis is given below (from Nugent and Anker, 1990).

3.1.2 Household economics approach

Becker is well known for pioneering the economics of the household, in which decisions of the household were placed in the neo-classical framework. The major approaches used here to explain fertility decline are: (a) quality vs. quanity, (b) altruism. We take a brief look at these approaches here:

a) Quality vs. quantity

This incorporates a substitution between quality and quantity in the determining of fertility. In his “An Economic Analysis of Fertility”, 1960, Becker assumes that parents have preferences regarding both the number and educational level of their children, where the educational level is affected by the amount of time and other resources that parents spend on their children. Investments in children’s human capital may then be derived as a function of income and prices. As wages rise, parents increase their investments in human capital, combined with a decrease in the number of children. Becker uses this theory to explain, for example, the historical decline in fertility in industrialized countries, as well as the variations in fertility among different countries and between urban and rural areas.

This approach fails completely in my view, because it does not show why there has been a sudden incorporation in the utility function of mankind from quantity to quality. It does not also explain why there has been a significant decline in fertility in societies where there has been no major increase in income or in the opportunity cost of time

38 For example, Schultz (1989), Youssef (1982), Anker (1982) and Mason and Taj (1987).

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b) Altruism

Economists have been aware of a strange twist in human “self-interest.” Very often, people seem to behave against their own self interest (not in a delinquent sense, as in suicide), but out of goodwill for others: “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it” (Adam Smith, in The Theory of Moral Sentiments).

Barro (1974) used the concept of altruism to prove the Ricardean equivalence. According to him, “if people are altruistic towards their children, (dynastic utility maximizers), an increase in public expenditure or cut in taxation financed by increased public borrowing will have no real effect other than by distorting marginal incentives. Realizing that present government generosity will have to be paid for by their descendents, people will in fact privately transfer to future generations an amount of resources matching the debt accumulated by the government” (Cigno, 1992).

This result has been critiqued by Wilasdin (1990) who showed that this result of neutrality of government debt does not hold if parents can choose how many children to have. “Given convex preferences, altrusitic parents will respond to the government’s increased borrowing partly by transferring more wealth to each of their children, and partly by having fewer children; government debt is not neutral” (Cigno, 1992). In other words, government debt can change the economy through changing N, the population.

Logan and Spitze (1995) point out that “older people tend consistently to be least likely to adopt the ‘pro-elderly’ position… Altruism, not self-interest, seems to govern the attitudes of the older generation in this sample.” What Logan and Spitze found is that elderly people are altruistic toward their young. This is precisely what we would expect to find on the basis of evolutionary biology.

2.2 Lower limit on fertility

We have seen above that it is relatively easy to model the decline in fertility that has taken place in the past century. The Easterlin synthesis seems to capture a wider range of factors, but does not seem to do quite as good a job at predicting a lower limit to fertility. As Schultz (1981: 235) points out, we need a mechanism that will yield a long-term stable equilibrium population. According to the basic models which consider the asset value of children, “If technical change and the accumulation of physical capital continue to increase labor productivity and wages, and encourage further per capita investments in human capital, the price of time should continue to increase in the future and contribute further to the reduction in fertility. Consequently, the price-of-time hypothesis that drives the demand theory of fertility does not prescribe how in a closed economy a new long-run population-economic equilibrium is achieved.” He seems to be quite pessimistic about this, and wants the state to ultimately subsidize the production of

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children.

In other words, if incomes ® infinity, urbanization ® 100%, female education and status ® the maximum possible, etc., then we might have that number of children born ® zero, leading to the collapse of civilization. The corner solution problem has been highlighted in Cigno (1991), and Schultz (1981). Cigno, while discussing the predictive power of the model which considers children as assets, states (1991: 153): "the growth of the financial sector (including in that the social security system, as well as banks, private insurance, and the stock exchange) tend to coincide, in the development of an economy, with a sharp fall in fertility, the break-up of the extended family networks, and a widespread reluctance on the part of the middle-aged to accept responsibility for the maintenance of elderly relatives.” Then he goes on to mention that in such situations, “The fact that fertility does not actually fall to zero, even for couples who make little or no contribution to the welfare of elderly parents (and must, therefore, realistically expect the same treatment from their own children), suggests … that the demand for children is not entirely derived from the demand for old-age consumption. In other words, we need to assume that, for some couples at least, children enter the utility function of their parents in some form in order to explain why children are raised even when they are not required for old-age security purposes.”

There are three ways to incorporate a lower limit to fertility in economic theory: two ways are endogenous (or supposedly so), and one is exogenous.

a) Endogenous positive lower bound:

i. Highly concave utility of consumption of children:

It is sometimes postulated that the first derivative of the utility function of consumption of children tends toward infinity at n = 0 (where n is the number of children). Thereafter the function bends inward very rapidly and quickly turns back toward zero. This can be artificially included in the problem in order to explain why there is (a) a positive demand for children and (b) why this demand does not shoot up too high.

ii. Single sided altruism: To ensure that at least some children are born in his model, despite all economic odds being piled up against them, Becker (1991) hypothesized that parents care directly about the utility of their children and they bring children into the world in order that this utility can be experienced both by parents and by children. This kind of ‘altruism’ is also compatible with natural evolution.

b) Exogenous positive lower bound:

According to my limited understanding of the two reasons postulated above, these so-called endogenous reasons are in fact exogenous reasons. For, we have no explanation for why the utility function for consumption of children is so shaped, nor why altruism

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exists in the first place. While the first explanation can only succeed by working backwards from data (i.e., parametrizing the concavity of the function in a way as to “fit” the data) the second explanation is actually exogenous, relying on our evolution to give us such a utility function. It is possible to explain the existence of altruism as an economic solution to a repeated game, as demonstrated by Axelrod (1984), but I suspect that such solutions are extremely tenuous, and susceptible to collapse given changes in technology, mobility of agents, etc.

The attempt to force endogeniety on the model in this artificial manner therefore appears to be highly contrived. Easterlin et al. (1980) did argue that there is a substantial biological, unavoidable, component to fertility (as interpreted by Sanderson, 1980). Yet, there was no formal modeling of this important characteristic in their model.

It is therefore much simpler, in my view, given our state of knowledge of evolution, to allow the forces of Nature to ensure to this. From the fact that the human species has survived so far, it can be deduced that there is an ‘instinct’ to survive and to pass on one’s genes to the future. This ‘instinct’ or hardwiring has evolved as a powerful component of human nature over millions of years, and there is no reason to believe that it will suddenly stop functioning, or become overpowered, merely due to economic reasons. Mankind in fact, generally speaking, from the study of demographic history, has always had a tendency to reach an equilibrium where it just reproduced itself. This required it (a) first, to reproduce itself, i.e., to have children, and (b) to not overdo it. We can see tendencies toward both these things in the current time; only, the period is too short, and the overshooting that takes place due to boundedness of human nature, seems to be obfuscating the observation of such a response.

In any case, I do not believe that we can reasonably attribute a lower bound to human fertility through economic reasoning. The forces of nature are too strong to be limited by mere economic reasoning. I feel more comfortable, therefore, with an exogenous explanation of the lower bound of human fertility, than with an ‘endogenous’ economic explanation. Therefore, we can much simplify this matter, at least for purposes of this study (which is more interested in the decline, rather than in the lower limit of fertility), by postulating an exogenous evolutionary factor (EEF), which ensures that the number of children per household will, on the average, be equal to or greater than one (n ³ 1). This factor is supported by other facts, too, which have not been explained in the economic models on altruism:

a. There are no general markets for children. If we were to gain utility from children in general, including utility from investment in them, then it would make sense to have markets for children.

i) Since procreation is a labor intensive occupation, those with comparative advantage in labor (generally the poorer sections of a population) would specialize in child production.39

39 It is true that immigration from poorer countries into Europe is being promoted on these grounds (Shultz, 1981:236).

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ii) Since people generally prefer more intelligent and beautiful children (based usually on criteria such as fairness of skin, aquiline nose, etc.), the bright, “blonde,” and otherwise unemployed teenage girls would reap the maximum benefits of this activity, producing up to 17 children each over their lifetimes.40

iii) There might even come into place corporations or institutions (on the line of Plato’s Republic) specializing in the production of children and breeding them till they got the best return from the market (like we breed animals).

But such markets do not exist in general. That is because people strongly prefer to have their own children, whose only characteristic is that they possess 50% of the genes of either parent. Therefore children are not a commodity, but a part of a chain of life passing through each individual.

b. Disproportionate expense on lost children: Not only does a market for children not exist, but also people strongly desire and are willing to spend huge amounts to “recover” their lost children, or to get custody of their children even after a household has been dissolved after divorce.

c. Desire to give children a start in life better than one’s own: As Poulson (1994: 176) points out, “What we observe in most societies is that parents want to give their children a start in life at least equal to or better than their own.41 In some cases this may mean investing in their child’s education, but in other cases this may be accomplished by transferring land or other forms of wealth to the child at various stages of the life cycle.” Parents often undergo inordinate and seemingly irrational labor to promote the development of their children.

Further, if one asks any parent, he or she will never be willing in any way to place a monetary value on a child, and if asked persistently, will state that the value of the child has been long recovered. That does not mean that economic calculations do not come into the picture in determining fertility, but that once a child has been born, the economic calculations decline in importance, and ‘quality’ considerations come to the forefront.

The EEF helps us drive fertility away from corner solutions, as well as explain why everyone will produce their own children for all times to come, even if economic logic goes completely against children. We need only hypothesize that n ³ 1. That does not preclude the collapse of human civilization, but it is hoped that it allows for other possible reasons for having a child, to play a positive role in determining fertility. EEF,

40 I have with me an advertisement from the Daily Trojan of the 16th of April, 1997, where a childless couple has expressed their desire to pay a ‘generous grant’ to a 21-30 year old blonde woman with blue or green eyes, and a small or medium build. 41 This lends support to some kind of altruism; actually, a better word perhaps exists: nepotism.

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as postulated above, is actually very weak. The intention is to merely support an equilibrium of perfect reproduction. It does not in any way drive women to have 15 children. Therefore, it is soon overpowered by economic factors, and allows the ‘rest’ of the fertility to be determined endogenously.

To postulate an EEF almost sounds heretical. As Bergstrom (1996) has stated, “It is easy to convince most economists that economic analysis would greatly enrich other academic disciplines, but economists are surprisingly reluctant to believe that reading anthropology, biology, history, psychology, or sociology is important for doing good economic analysis.” This work “has great potential to enrich our understanding of economic relations within families.” For example, it is possible to hypothesize that “human preferences were shaped by natural selection.” This leads us to genetically programmed utility functions. “Much as economists postulate that individuals maximize utility, biologists postulate that individuals maximize fitness.”

In an even more biologically driven approach, Berstrom (1996)postulates that “natural selection is for utility functions rather than for hard-wired actions,” in other words, it is assumed here that human beings are moving away from the ‘instinct’ programmed into animals toward getting utility in a rational maximizing manner. This avoids the problem of ‘programming’ implied by the EEF. But I am sceptical about such arguments because they imply that if children given sufficient disutility, then a corner solution could occur again, leading to a collapse of the human civilization. Bergstrom (1996) then mentions a semi-Kantian utility function that is half-way between selfishness and the Kantian ethic. According to the Kantian ethic, “parents do what they do for their children not because they like it (an ‘altruistic’ parent gets more utility feeding his child than feeding himself) but because they think it is right.”42 The semi-Kantian maxim is, “Act toward your siblings as you would if you believed that with probabilty one-half, your sibling would copy your action.”

One’s confidence in rejecting altruism as a valid cause for having children is supported by Cigno (1992). He finds that the predictions of the models of altruism do not match observed data. “Recent economic explanations of changes in fertility behavior have focused on the effects of labor-market-related incentives. The present paper draws attention to another set of incentives, those connected with the transfer of resources over time. The theoretical implications of intergenerational altruism as a possible motive for having children and making transfers to them are considered, and contrasted with those arising from the competing hypothesis that such actions are motivated by old-age-security considerations. From a comparison of these theoretical predictions with the findings of a number of empirical studies, it would appear that self-interested concern for one’s old age, rather than any great love for future members of one’s dynasty, is or has been so far the dominant force driving fertility and intergenerational transfers worldwide” (from the abstract of Cigno, 1992).

Before closing this topic, it is necessary to admit that the EEF sounds like human beings are at least in part “slaves to their hormones,” which is a major criticism of 42 Cigno (1991: 99).

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sociobiology and evolutionary psychology. I think that to deny this would be more irrational than admitting that we are at least partly determined by our nature as primates.43

2.3 Link between Old Age Security Motive and Fertility

Having set the general framework for the paper, we explore in detail the role of the OASH in determining the demand for children.44 We will look both at the theoretical and at the empirical literature. The area of fertility is very complex; it is not quite easy to distinguish relevant theories from the irrelevant ones. We should also realize at the outset the limitations of considering human fertility in purely mathematical terms. Alfred Marshall said in 1890, in his Principles of Economics admitted that most economic phenomena “do not lend themselves easily to mathematical expression.”

The approach taken here is to consider most of the issues related to the OASH and fertility, and to try to illustrate the issues with theories and empirical literature.

What is old age?

The word “old age” can only be precisely defined in the context of a particular study. In specific situations, the word might refer to the age of retirement, though most people at the beginning of their retirement might not agree that they are old. Old age is also a function of a persons’ health and state of mind.

Old age security vs. pension

Dutta and Nugent (1984) define the old-age security motive as the need for “protection or insurance against inability to earn one’s own support because of disability.” They add that the “value of insurance against disability and old age should not … be construed as being limited to those with either the misfortune of being disabled and unable to work, or the fortune of having nothing to do.” Therefore it is quite possible for an old aged person to be employed and receiving wages, but still feel more secure as a result of the availability of his children. Further, this is not quite the same as the pension motive, which deals only with the earnings component in old age. Old age security is concerned with the risk factors, primarily. Even a weathy person (who presumably has adequate ‘pension’) might need a son for support: “the fact that wealthy men are more secure than poor ones should not necessarily be taken to imply that sons were not particularly important sources of support” (ibid). In this context, it is not merely in the developing nations that parents desire to be close to their children for old age security: “On the contrary, several sociological studies, notably in the United States, the United Kingdom,

43 One does not deny that there are a lot of “spiritual” tendencies in human beings, but it is not the lot of the bulk of mankind to become saints. If that were to happen, in any case, human beings would become extinct. Therefore we must give due respect to our natural origin.44 “… the marginal propensity to consume child services is fairly low, especially after the first three or four children” (Nugent and Gillaspy, 1983).

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and Denmark, have shown that most old people have at least one child living nearby, often only a few minutes’ traveling time away” (Britannica Online).

It would thus appear that old age security is a stronger motive than the pension motive, since it includes non-monetary factors.

Gomez and Nugent (1995) state that “[b]y a considerable margin the old age security motive for fertility remains the least studied and least understood motive for fertility. Over the last two decades have appeared a variety of theoretical models claiming various positions on the motive’s relative importance, ranging all the way from ‘it cannot possibly be important since in present value terms there will always be better substitutes than children for providing support or security for old age’ (Lindert, 1980, 1983) to the ‘safety first’ argument which argues that children are a unique insurance substitute in rural areas of developing countries which lack both credit and insurance markets (Leibenstein, 1957 1975; Cain, 1981, 1986a, 1986b). The more realistic of the models would seem to allow for the possibility of an old age security motive, though by no means inferring that it would be the primary one.”

2.3.1 Models which incorporate only the pension motive (children as assets)

The underlying neoclassical model here is that observed fertility outcome for any couple is the solution to their life-cycle optimization problem. In such models, children are viewed as assets. Parents are thought to evaluate the costs and benefits from children against the ‘market’ or other opportunity costs. The expected net present value of the marginal child determines the demand for children.

a) Children might be valuable even before leaving the household:

It is possible that children in pre-transition societies provide a net positive value even before becoming adults and leaving the house. Nerlove (1991) considers the important role in household production, as in the family farm, provided by children, in valuing children. According to this theory, children might have positive value even before they leave home.

Bulatao and Lee (1983) reviewed various studies on net child costs and concluded that average child (boys and girls combined) would not provide net flows to parents before leaving the parental residence. Thus children are not net producers while still with their parents.

b) Children are valuable in pre-transition societies over a lifetime:

Becker (1960) argued that “… it is possible that in the mid-nineteenth century children were a net producer’s good, providing rather than using income.” Caldwell (1976) hypothesized that the average return from a child were positive in pre-transition societies over the life-cycle, and became negative in post-transition societies. According to Caldwell (1976, 1982), there is a transitional point in this cost-benefit analysis before

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which fertility is high and subsequent to which it is low. In the Caldwell thesis, the direction of the net wealth flows between parents and children plays and important role in fertility behavior. The demographic transition, according to him, hinges on the direction of intergenerational wealth flows. According to him, the change in the direction of the net flows from children to parents [when the children are used for labor, etc.] to parents to children [when the parents have to invest in the children in order to make them competitive in the market place], explains the transition from high to low fertility. “However, inasmuch as Caldwell has not been able to explain the turning point in the direction of these net flows, even the considerable interest and controversy that this thesis has generated has not been sufficient to allow its integration into the supply-demand framework” (Nugent and Anker, 1990). We also see that empirically, this hypothesis is extremely suspect.

Cain (1977) in a study in Bangladesh,45 Caldwell (1982) in a study in Nigeria, Dow et al (1994) in a study in Kenya found that there were positive average returns to children in these nations. However, there are a few criticisms of these views: “Caldwell’s (1982) own analysis of transfers in Nigeria is primarily based on qualitative data and hardly sufficient to provide a reliable quantitative answer on the net flows between parents and children” (the Ivory Coast article). Also, it has been felt that while the analysis of Dow et al is provoking, “their data are also subjective and incapable of determining net economic flows” (the Ivory Coast article).

On the other hand, various studies have shown that the net asset value of a child is actually negative. Mueller (1976)’s findings about the value of children in peasant agriculture violate the Caldwell hypothesis. She analyzed detailed life-cycle data of developing countries and found that children are net financial burdens on parents in peasant societies when survivorship is included and a zero discount rate is used. Lee and Miller (1994), while studying intergenerational flows in the 1980s in the US, confirmed that at in the post-transitional societies, the present value of children is negative. Paul Turke (1989) carried out field studies in the Micronesian islands of Ifaluk and Yap and concluded that children tend to be a net economic burden on their parents. Studies of hunter-gather tribes (the Ache in Paraguay, the Piro of Peru, and the Masiguenga of Peru), carried out by Kaplan (1994) also reject the Caldwell hypothesis. Thus evidence seems to be increasingly pointing to the NPV of children being negative in both pre- and post-transition societies. Or, at the best, as in the case a study of USA by Lee, the return was seen to be very low - between -1 to 1 percent.46

Various studies have tried to measure the economic value of children. Ahn (1995) estimates the gender- and age-specific values of children using a dynamic programming model. Other studies that have carried out important analyses of intergenerational transfers, include Altonji, Hayashi and Kotlikoff (I992, 1995), and McGarry and Schoeni, Cox, on developed nations. There have been studies by Lucas and Stark (1985), Ravallion and Dearden (1988), and Hoddinott (1992) on developing nations, and Lee, Parish and Willis (1994) on the study of nations with strong norms of filial loyalty45 Corbridge’s book has a paper by Cain.46 This calculus is extremely ridiculous as any parent will vouch for.

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“Overall, the evidence seems strongly consistent with the evolutionary view as expressed by Kaplan. Over the course of a lifetime, resources tend mainly to flow from the old to the young and not the other way around” (Bergstrom, 1996).

Basic model:

Leibenstein (1957) identified three motives for fertility: (i) the consumption motive, (ii) the production motive, and (iii) the old age support motive. Initially (Leibenstein, 1957) focused on the pension motive.

utility = f(security, consumption levels of both pecuniary and non-pecuniary)

where children are assumed to be able to contribute to each type of utility. Leibensten then argued that the costs of children are usually lower than the benefits from them, particularly in LDCs, and therefore there is an incentive to have more children there than in developed nations.

An overlapping generations model with externalities:

“Neher (1971) was the first to use the Samuelsonian life cycle model to represent fertility and other choices of the individual decision-maker. Moreover, he built into the model certain characteristics of developing countries such as incomplete capital markets and added a third generation, namely, dependent children. In order to focus more specifically on the old age support motive for fertility, he imposed the following simplifying assumptions:

(1) that old age support is the only reason for having children; (2) that future conditions are known with certainty (thereby ruling out the variant which later on we designate the old age security motive); (3) that the three stages in the life cycle are of equal length; and (4) that there are no storable assets or markets for capital or land which could be used so as to provide for old age.

“Fertility decisions are made by young adults who choose the number of children in such a way as to maximize the utility they derive from their consumption streams in working adulthood and old age. With technology fixed and two inputs, land (which is in fixed supply) and labor, there is one family size which maximizes per capita consumption. Once that size is attained, the socially optimal fertility rate is merely the replacement rate, i.e., the rate needed to maintain the optimal family size. Each young adult couple, however, has an incentive to exceed this replacement fertility rate inasmuch as the couple can look forward to receiving all the benefits of children (i.e., support in old age) while paying only a portion of their costs (those of childhood but not of their old age). As a result, the old age pension motive generates” (Nugent and Anker, 1990).

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Neher concluded that it is the existence of an externality in the benefits and costs of children which makes the old age security motive result in excessively high fertility rates.

A simple graphical model of the old age pension motive and fertility:

Nugent and Anker (1990) describe a simple graphical model which captures much of the substance of the issues in relation to old age security and fertility. This uses the cost-benefit analysis of the marginal child.

Other complexities:

The issue, in my view, is not quite so simple. Institutional factors come into play here. Consider the case of Costa Rica where there is a pension system in place. Pension systems are expensive, and they are inequitable: being ‘progressive.’ Therefore, there are likely to be some people who gain from their taxes put into pension funds, and others who lose, i.e., those who could have done better by placing these savings into the market. In such a case, the person who loses from the pension programs might have an incentive to increase fertility, as illustrated in the table below.

Net gain from marginal children Assumption: children are normal goods1) + ve NPV and gainer from Pension Increased fertility 2) + ve NPV and loser from Pension Increased fertility3) - ve NPV and gainer from Pension Reduced fertility4) - ve NPV and loser from Pension Will depend on the relative loss

We observe that when the NPV of a marginal child is positive, there will be an incentive to increase fertility (supporting Caldwell’s pre-transition hypothesis). But when the NPV is negative (as has been empirically found, in most cases) the loser from the pension programs might have an incentive to maintain or even increase fertility. Therefore, the total effect of a pension program are not quite obvious.

Given the rapid nature of change of the environment, models which incorporate such change are a valuable addition to the literature. Joseph (1979) has a model in which “a couple compares the number of children it desires with the number of children it has and decides a spacing strategy… The decisions are reviewed periodicically and may be revised as circumstances change.”

c) A system of pay-as-you-go pensions, requiring net transfers from young to old:

If we consider the case of Costa Rica, however, we would like to model a formal social security system which provides pensions. One of the early, non-intuitive models of this nature was by Samuelson (1958). He “attempted to demonstrate the viability of a formal “pay-as-you-go” system of old age support such as the social security program in the United States. He did so with the help of a two-generation life-cycle model. In such a

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model everyone is in one of two generations, the younger generation which constitutes the labor force and contributes to the support of the old generation, and the old generation itself, which lives entirely on the support received from the younger generation. Samuelson demonstrated that the social security system of intergenerational transfers from young to old would be viable indefinitely only if the base of the system were growing steadily as a result of growth in either productivity or population. In the absence of productivity growth, population growth would be necessary for the viability of a satisfactory system of old age support. (Subsequently, however, Aaron (1966), Samuelson (1975a, 1975b) and Arthur and McNicoll (1977, 1978) showed that Samuelson’s conclusion holds only if the capital-labor ratio is maintained in the face of higher population growth)” (Nugent and Anker, 1990).

We see that pensions based on net intergenerational transfers to the old are not easily supported in equilibrium unless there is population growth in the economy. This result goes clearly against the policy prescriptions which suggest that pay-as-you-go systems of pension would reduce fertility.

Role of pensions and social security: empirical evidence

“The effect of social security systems [on fertility] … is not well established. There are four kinds of data that have been brought to bear on this issue: (1) cross country data, (2) anthropological analysis of fertility and social security in certain countries, (3) survey data on people’s stated motives for having children and (4) experimental data on savings programs designed to provide incentives for reduced fertility. These data sources vary enormously in their richness and their findings” (Cochrane, 1988).

One should also point out that the empirical literature is clear on the fact that children are not the only investment of the peasant. For example, Simon (1980) cites various studies of Indian peasants that show “that poor Indian farmers save very respectable proportions of their incomes - cash savings of perhaps 12% gross and 8% net. And when non-monetary saving is included - as it should be - ‘the gross savings-income ratio among rural households would rise to 20% or so.’” This shows that even in the absence of asset markets, children are not the only asset. Unfortunately, given that farmers have limited access to banks, their cash savings usually can be expected to earn negative interest: hence, children, who are also likely to earn negative net returns, are substitutes for savings.

3.3.2 Models which include children as insurance (old age security motive)

As noticed above, from empirical findings, it appears that children have are have negative net present values; this would imply that if we only consider the asset value of children, then we might very well get a corner solution of zero children rather quickly. On the other hand, if the insurance aspect is included, and the OASM allowed for, we are able to get a positive demand for children despite negative asset values.

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It makes good sense that in subsistence societies, one of the chief reasons47 why children are demanded is because of the risk aversion of agents. If we weight the mean return from a child with the insurance provided by the child in the absence of alternative markets for insurance, we arrive at a positive demand for children. In 1968, Leibenstein had restated his initial fertility theory and “placed priority on the security motive as a result of the ongoing and insecurity-increasing tendency in LDCs of the fragmentation of the extended family” (Nugent and Gillaspy, 1984).

i) Ensuring ‘loyalty’ through internalization of social norms

A good model of old age security has not only to show that there is a need for insurance and that in the absence of markets for insurance, children will be utilized for this purpose, but it has to show the incentive structure for children to be loyal to parents when there is such a need. Different models use different procedures for enforcing the returns from children. All these methods are costly and not Pareto optimal, since they involve overcoming opportunism (As mentioned earlier, we discount any explanations that require the assumption of altruism).

“In a wide-ranging and illuminating essay on social norms, Elster (1989:113) suggests that: ‘Intergenerational reciprocity is … found between parents and children. Assuming that parents cannot disinherit their children, the latter have no incentive to take care of their parents in old age … Yet, most societies have a norm that you should help your parents; in return for what they thought (allied to other thoughts) to argue that this third type of answer we are considering here is of no use; that internalization of norms is the central means by which norms are in fact sustained.”

Dasgupta (1993) works out a simple overlapping generations model for this purpose. According to him, the “near-stationarity of both kinship lines and the circumstances facing people in traditional societies together imply that mutual insurance arrangements don’t always look like mutual insurance agreements. There can be layers of behavioral norms and rules whose compliance sustains a variety of insurance arrangements. There is nothing mysterious in such acts of reciprocity; certainly, there is no reason to invoke the idea that there is greater innate generosity and fellow-feeling among poor people in poor communities than exists among members of modern urban societies.” “… Within rural communities there is thus an integral system of mutual insurance against illness, production failure, and general bad luck.”

Dasgupta then asks the extremely relevant question, viz., how is it that we these contracts are enforced. The answer to this is extremely relevant in the case of old age security. For example, how do parents enforce reciprocity from their children? Among the three possible answers that he examines, the most prominent appears to be the internalization argument, viz., that the practice of reciprocity is internalized by each of us

47 That the supply factors had relatively little role to play is evidenced by the fact that the fertility has fallen far beyond the levels that would have been necessary to account for the decline in infant mortality.

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over time through communal living, role modeling, education, and through experiencing rewards and punishments.

“This process begins at the earliest stage of our lives. We internalize social norms, such as that of paying our dues, keeping agreements, returning a favor; and higher-order norms, as for example frowning on people who break social norms, and so forth. To use the language we have developed earlier, the claim here is that a person’s utility function is itself a reflection of an ordering over actions in part driven by social norms. By internalizing a norm, a person makes the springs of his actions contain the norm. He therefore feels shame or guilt in violating a norm, and this prevents him from doing so, or at the very least puts a brake on his violating it unless other considerations are found by him to be overriding. … Now it is evident that people differ in the extent to which they internalize social norms. They also differ in the extent to which they are willing to trade off the dictates of norms against personal desires, other commitments, competing loyalties, and so on. … social norms could be self-sustaining even were the socialization process ineffectual.”

The internalization of social norms creates a set of beliefs which are then shared by all members of the society and which can then support various sequential equilibria.

ii) Ensuring loyalty through the feeling of guilt:

Becker (1993) believes that parents can create a feeling of guilt in their children to ensure provision of old age support. This can be subsumed in the concept of ‘after-life’ introduced earlier, and the study of institutions designed to promote guilt.

iii) Ensuring loyalty through strategic bequests:

Goode (1963) and Bernheim, Shleifer and Summers (1985) have models wherein parents use bequests strategically to promote loyalty from children. But Cox and Jiminez (1995) reject this as being an important theory in economically backward societies since they claim that there is not much asset accumulation in any case to promote the motive.

I am not quite sure whether the criticism is justified. In fact, it is in poorer societies that the marginal utility of even smaller amount of assets would be higher and act as incentive to the children who need every bit of assets that they can get in order to raise their standards. It is in the societies which are seeing rapid income growth that the marginal value of the bequest of the parents would be low. Also, one of the use of property rights as developed over the ages, was perhaps to ensure this loyalty from children.

iv) Ensuring loyalty through mutual aid:

Kotlikoff and Spivak (1981), Cox (1987), and Cox and Stark (1992) have models on these lines. The problem here is that infirm old parents can hardly be of any aid to children. Therefore, the quid pro quo might not support the infirm parent.

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v) Loyalty through hard-wired ‘sense of duty: ’

Wilson (1993) argues that we are hard-wired (relatively weakly) to perform their duties toward the society. To paraphrase Wilson (1993:113) in the context of old age security, a tiny and remote chance of being honored by one’s society is of far higher value than the immediate gain from not looking after one’s parents. He points out that utilitarian calculations can become extremely hollow when honor is at stake. He traces the development of the sense of duty to a strong attachment to one’s parents, as shown from various studies.

To me, this ‘hard-wiring’ seems to be only a starting point. In the absence of institutions to support this, the sense of duty may or may not be adequate to support the old in their times of need. I would expect that some children would be altruistic toward their parents by virtue of this ‘hard-wiring’ even without other threats, but it is perhaps much easier to ‘frighten’ them into being virtuous by showing them the possibility of ‘hell’ if they do not look after their parents.

vi) Ensuring loyalty through implicit intergenerational contracts and migration:

Lucas and Stark (1985) have a basic model on this line. Developing this line further, Arcand et al. (1995) develop a two sector general equilibrium, three period, overlapping generations model which incorporates intra-family and inter-generational contracts. According to this model (which resembles the strategic bequest model considerably), parents set up incentive constraints for children who migrate to urban areas to ensure that they “remit,” on the lines of the principal-agent problem. “In period one, the parents present those among their offspring who decide to migrate with a ‘gift’ which allows them to migrate to the city, accumulate human capital, and consume a sufficient amount to survive. In period two, the migrant secures an urban sector job with probability one and remits to his parents in the countryside. For this arrangement to be self-enforcing however (altruism is assumed away here so as to focus on what is individually rational), it must be the case that the migrant’s parents hold a ‘sword of Damocles” over his head were he to fail to remit. Otherwise, it would not be individually rational for the offspring to remit in the second period and, knowing this, the parents would not have extended the initial payment in the first period to begin with, thus unraveling the whole migration process from back to front. The existence of the last period threat available to the parents in the case where the migrant does not remit is thus the key to the whole Lucas-Stark approach.

“There are a number of social structures which may easily furnish the parents of a migrant with credible threats. These include the potential return to the village of the migrant in the final period of his life (either to retire, or as was suggested to us by a Cameroonian student, to be buried), the desire by the migrant (who is usually a younger male) to eventually wed a woman from his native village, or the eventual bequest of part of the parents’ assets to the migrant. The precise form of the threat is likely to differ

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across cultures: what matters is that it exists, for it is the threat which eventually sustains the entire process, if one abstracts from altruism.

“In order to be able to integrate their approach in a tractable manner into our growth model, we will assume that the failure to remit results in the guilty offspring being subject to a “social sanction” which causes him a loss of utility which is an increasing function of the magnitude of the initial gift he was provided with by his parents in order to allow him to migrate to the urban area.”

Complexities in the old age security motive:

The old age motive has been downplayed in the literature for the following reasons (compiled in Nugent and Anker, 1990):

People in developing countries are thought to have short planning horizons;

Even if they had a longer planning horizon, the “present value” of transfers from children might be quite low due to the length of time before pay-off;

There is a great deal of uncertainty about children’s actual ability to provide support;

Changing economic conditions have brought inevitable changes in traditional social relationships, including filial loyalty;

Parents have at least as great a desire to provide for their children as to be supported by them;

Large numbers of children are unnecessary even if parents were to be dependent in old age;

Old people continue to support themselves as long as possible in developing countries, making the dependency period relatively short.

An illustration of a critique of the relevance of the OASH is in Vlassoff and Vlassoff (1980). They “provide an excellent piece of work on the old age security arrangements and attitudes among men in India. The theoretical and anthropological studies raise several questions (1) granted that children may be an important source of old age support, how many children are needed to ensure adequate support? (2) given that men tend to have very short periods of inactivity prior to death in many poor countries and women tend to be considerably younger than their husbands and are longer lived in most areas, are women more likely than men to put a premium on the old age security for children?, and (3) how much of the need for old age support is financial and how much is emotional and thus the desire to live with children in old age may not be a financial motive? Each of these questions are important for designing policy. Some survey data can provide insight into these factors, but relatively little work has been

45

done” (Cochrane, 1988). Dutta and Nugent (1984) have a critique of the approach of Vlassoff and Vlassoff, and it appears that arguments against the relevance of the OASH are rather weak.

Existence of the old age security motive: empirical evidence

a) Value of Children Study

I can do no better than to quote from Cochrane (1988), who has an excellent summary of the findings from this study. “The most thorough examination of the motives for child bearing in developing countries is the Value of Children Study... data seem to indicate that husbands and wives express the same relative importance to the need for children for old age support and this declines in about the same way as national fertility declines… In those countries where there is not a strong preference for sons (the Philippines and Thailand), the extent to which people expect old age support from sons and daughters are about equal. In countries such as Korea and Taiwan where sons are valued much more than daughters, there is a wide difference between the extent to which husbands and wives rely on sons rather than daughters for old age support.

“There are several interesting questions that need to be addressed with such data: (1) what are the determinants of such attitudes towards the utility of children?, (2) whether the desire for old-age support affects family size preferences?, and (3) whether the desire for old age support affects behavior? The Value of Children Survey did not provide analysis separately for old age support but combined it with data on financial assistance from children. The study found significant negative correlations between economic motives for child bearing and parental education and income in all six of the countries in their sample at that time (Arnold et al, 1975, p. 109). A recent study of husbands and wives in Pakistan showed educational differentials in the amount of support expected from children (Sotoudeh-Zand, 1987). A study of Egyptian husbands and wives showed strong negative relationships between the extent of old age support expected from children and parental education in both urban and rural areas. Differences across income and expenditures groups were also sharp, but not always monotonic (Hallouda et al, 1983). The effect or reliance on old age support on desired family size is not well established. The Value of Children Survey found that among individuals in Korea, Taiwan, Hawaii and the Philippines there was a significant positive association between the economic motivation for childbearing (including old age support) and ideal family size. No significant relationship was found in Japan or Thailand. A study using Egyptian data mentioned above found a significant effect of expectation to live with children in old age and desired family size among women in urban and rural areas. There was no significant effect for men. Nor was the extent of financial support expected from children significant for men or women (Cochrane, Khan and Osheba, 1988).

“There is little data on whether the old age motive for childbearing causes a couple to use contraception earlier or more frequently as would be expected if it had important effects on desired family size. Bulatao in analyzing the Value of Children data

46

compared the attitudes of those who were high parity contraceptive users with low parity users. There was some relationship between the expectations of old age support and contraceptive use, but in some cases the differences were small and in several cases were reversed (Bulatao, 1979)” (Cochrane, 1988).

b) Other cross country studies

“The major cross country studies that have attempted to estimate the effects of pension programs on fertility are that by Holm in 1975, reanalysis of his data by Kelly et al in 1976, reanalysis by Holm himself in 1976 and a more recent effort by Entwisl and Winegarden in 1984. Holm attempted to test two hypotheses: (1) the coverage of a country’s old age or retirement, invalidity, and surviorship programs will vary inversely with that country’s subsequent fertility, and (2) The benefit level of old age, invalidity and survivorship programs will vary inversely with subsequent levels of fertility. Data (partly generated) from 67 countries showed strong zero order correlations between coverage and benefit levels and total fertility rates. …” (Cochrane, 1988).

c) Review of empirical literature by Cigno (1992)

1“Surveys of parental attitudes in developing countries (for example Caldwell, 1967), invariably report significant proportions of parents giving old age security as a motive for having children. What people say of their motives must always be taken with a pinch of salt, but evidence based on actual behavior points in the same direction. Ridker (1980), for example, reports a substantial fall in fertility among women participating in a no-birth bonus scheme run by three Indian tea estates. Chernichovsky (1982) reports evidence in a cross-sectional survey of an Indian village that income received when parents are economically productive has a positive effect on fertility, while expected income at retirement has a negative effect. Developed countries do not appear to be any different: econometric evidence of a positive effect of child benefits on British fertility is found in aggregate time series by Ermisch (1988), and in the life-histories of a sample of married women by Barmby and Cigno (1990)” (Cigno, 1992).

Empirically, therefore, there seems to be a relatively strong existence of the linkage between old age security motive and fertility. Therefore, it is a topic worth exploring in greater detail.

We must note again, that there could be other issues involved in the OASM, such as gender issues, based on the relative importance of decision making in the household, and so on. In the basic model, on would have to try to exclude such complications, but these should be included to the extent possible, in the later models.

2.3.3 Models that emphasize altruism

“Altruism is incompatible with the old-age-security hypothesis (Cigno, 1992).” We now take a brief look at models that satisfy the old age security motive through altruism. It is thought that children are altruistic toward their parents, apart from parents

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being altruistic toward their children, as already explored earlier. Models of single-sided altruism, while capable of explaining why there could be a lower limit on fertility, are unable to explain how the old could survive through the agricultural epoch. If altruism runs from parents to children but not the other way round, aged parents may well want but will not get any support from their grown-up children. The reason is pointed out in Cigno (1991, Chapter 9): as it only cares for the subsequent one, no generation will want to pay anything to the previous generation, because it will not wish to recover the cost of that by lending to the next generation at more than the market interest rate of interest. Therefore we shall not observe net intra-family transfers from the middle-aged to the old unless children are altruistic towards parents” (Cigno, 1992).

Therefore Becker and Barro (1988) include models of two-sided altruism. They argue that their “… analysis contains both the Malthusian and neoclassical models since fertility is endogenous and rates of return on investments in physical capital decline as its stock increases. The endogeneity of fertility also leads to multiple steady states: A ‘Malthusian’ undeveloped state with high birth rates and low levels of human capital, and a developed steady state with much lower fertility and abundant stocks of human and physical capital.” “In the Barro-Becker model the structure of individual preferences induces a dynastic utility function which generates the first-best rate of population growth. In other models, while the rate of population growth might not be the only one which maximizes social welfare for a particular set of intergenerational welfare weights, it is Pareto optimal. This is so since even though the given equilibrium rate of population growth may imply very low child quality and therefore welfare (the so called “repugnant conclusion” of Parit (1984)), it is the rate which maximizes the utility of the parents/ family and hence, for example, lower fertility, while it might improve the welfare of the children, would reduce the utility of parents/ family” (Baland and Robinson, 1996).

Zhang and Nishimura (1993) assume children’s altruism toward parents in a two-overlapping-generations model with endogenous fertility. Parents raise children because, when retired, they expect gifts from their children who are essentially a capital good. Individuals’ behavior between generations is examined by analyzing a Nash equilibrium, which is then compared with a social planner’s optimal allocation. The pay-as-you-go public pension program is viewed as the optimal gifts from the optimal allocation when the latter is implemented. The effect on fertility of the introduction of a capital market is also analyzed. The validity of the old-age security hypothesis is shown to depend on the parameters of utility and cost functions.

Cigno (1991) shows how two-sided altruistic models are compatible with the argument that “fertility appears to fall drastically, but not to zero, with the development and widespread availability of the market (or State) based methods of providing for old age may thus be taken as additional evidence that, for some couples at least, children are a source of direct utility.”

To counter-argue the utility of such models, we repeat our argument that there is no reason that man evolved with altruistic notions toward the old. In fact, Hamilton (1964) and Dawkins (1976) strongly question the notion that transfers from children to

48

parents make any evolutionary sense. For children to devote resources to parents would not be an evolutionarily stable outcome, since the parents are likely to be beyond their reproductive age.48 The fact that humans have been able to live longer than their ‘useful’ life to nature, can therefore not be attributed to an altruistic motive which suddenly developed toward the old along with the agricultural revolution. It must be an artificial construct, and hence, explained by institutional design rather than by altruism.

2.3.4 Models that allow change in preferences

According to this view, preferences for old age security are changing over the course of time as a result of the influences of modernization. Bengson (1993) offers viewpoints on the changing preferences on the role of children in providing old age security. Lee (1980) reminds us that it is not necessary that only the incentives for reproduction might be changing the observed demand for children, but the very utility function might be a function of time and modernization. He uses what is called a “stock adjustment models” of fertility. Achenbaum (1993) has a model of this nature too. However, as discussed earlier, we shall not investigate models of this nature.

48 We need to examine also the theory of Turke (1991) who discusses an evolutionary theory of demographic transition, which he has labeled the kinship hypothesis. According to Turke, human learning and culture have also evolved by natural selection, implying the coevolution of mechanisms that assure their use in adaptive directions.

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Chapter 3Theoretical and Empirical Models to be used in this Dissertation

We must keep in mind what Nugent and Anker (1990) have so perspicaciously stated in their (1990) paper: "... it is possible to construct theoretical models of the relation between either old age support or old age security and fertility that gives virtually any kind of result, ranging from unimportance to paramount importance. Moreover, since differences in implication can be traced to rather specific assumptions, often of questionable realism, it is clear that the controversy can be cleared up only through carefully done empirical studies." The crucial aspect therefore is the determination of suitable empirical models to test the relationship between old age security and fertility. But it is also worthwhile to determine a suitable theoretical model, if possible. This section is in the nature of an exploration in these directions, of empirical and theoretical modeling.

3.1 Expected relationships

Data is available for two categories of people: the young (who have not completed their fertility so far), and the old (who have completed their fertility. I am proposing below, based on the survey of the literature, above, the following relationships which need to be tested. At this stage, one should also mention that the proposed relationships are not uni-directional, i.e., there is simultaneity in some of the relationships. Possible econometric models will therefore be written down in due course.

3.1.1 Desired fertility

From our study so far we expect desired fertility of a peasant in rural areas of developing countries to display the following relationships:

Directly related to

a) Old age security concerns

* risk aversion (which means that the agent will prefer to have lower variance of return in old age)

Possible proxy: y - pci

where y = income of agentpci = per capita income of community

Also, women can be expected to be more risk averse in rural situations. Therefore, the sex of the agent will be help to compare the outcomes.

50

* Expected net returns from children (both in their childhood and in their old age: in some cases, it just might happen that children have positive NPVs, particularly if we add returns from child labor)

Empirically, most studies show a negative NPV. But it is possible that in some cases, NPV might be positive.

* Expected non-cash care from children.

b) Other factors

* infant mortality and child mortality (the higher the mortality, the greater the number of children produced).

Data on this can be often procured from census data.

* Cost of contraception

Inversely related to

a) Old age security concerns * security of ‘returns from children’

The probability of returns from children will be measured through an index of the strength of old age security institutions in the community.

* size of bequest to children.

Proxy: the wealth of the elderly person

* Agent’s expected income

* Expected economic surplus from children (higher the education of children, the higher the surplus expected)

Proxy: educational level of children

* costs of children (including the costs of education)

Proxy: A possible function of the educational level.

b) Other factors * level of urbanization

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* position of women in society (incl. female education)

* agent’s own level of education

* existence of capital markets (an index will be devised for this)

* strength of community care and norms (relatives apart from direct family members): an index will be devised for this.

3.1.2 Completed fertility

It might not be possible to get a measure of total fertility, but completed fertility can be used in its place. It can be expected to display the following relationship:

Directly related to

a) Old age security concerns * risk aversion (which means that the agent will prefer to have lower

variance of return in old age)

Possible proxy: y - pci

where y = income of agentpci = per capita income of community

* Actual net returns from children

b) Other factors * Infant mortality and child mortality, prevailing at reproductive age

Inversely related to

a) Old age security concerns * Actual care provided by children (including cash, kind)

* size of bequest to children (and timing of the bequest). Proxy: the wealth of the elderly person

* Agent’s actual income in youth and old age.

* Expected economic surplus from children (higher the education of children, the higher the surplus expected)

Proxy: educational level of children

* costs of children (including the costs of education)

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Proxy: A possible function of the educational level.

b) Other factors (prevailing at the reproductive age)

* level of urbanization * position of women in society (incl. female education)* agent’s own level of education* existence of capital markets * strength of community care and norms (relatives apart from direct

family members).

The data is rich in data relating to inter-generational transfers, and much other information. It is not quite clear to me at this stage, however, whether suitable proxies will be possible to create for various factors mentioned above. Nugent and Anker (1990) have proposed an extremely complex, modular approach to the testing of the relevance of the hypothesis. It will require considerable effort to convert the theory and this approach into suitable econometric models, where variables are supported by the available data. “Researchers have applied different econometric techniques to examine the determinants of fertility. The most common estimation techniques have been single equation ordinary least squares (Schultz, 1978; Olsen, 1980; Lee and Schultz, 1981), Tobit maximum likelihood (Zhang, 1990), and sequential logit (Zhang, 1994)” (Asgary and Pagan).

3.2 Theoretical models

We find that it is extremely difficult to create a neo-classical model that shows the above, ‘desired’ relationships.

We begin with the model of old age pension and fertility proposed by Nerlove et al (1987:120), and then, after exploring its weaknesses, propose a modified, basic model with uncertainty. Thereafter, I show other models that can be developed on these lines to incorporate the complexities observed in nature. I then try to write a few basic empirical models which will test these theoretical models. Finally, I list some of the other complexities we need to incorporate into empirical modeling to take into account the complex inter-relationships that are observed in reality.

3.2.1 A basic model of children as capital assets (pension motive)

“A simple model of the Old Age Security Hypothesis (Nerlove, 1987:120)”

For convenience, I am merely reproducing verbatim below the model from Nerlove et al, only modifying a few notations for purposes of uniformity with other models to be written down in due course, and adding a few expository points at various places.

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“Let parents live for two periods during which they consume c1 in the first period and c2 in the second. Utility is assumed to be a function of only c1 and c2, i.e., u = u (c1, c2). All income is assumed to be produced by labor alone, and parents and children are assumed to receive an endowment per capita of y1 and y2, respectively, in the two periods, measured in units of consumption. Parents are assumed to earn nothing in period two and subsist on transfers from their own children and returns from prior investment. Thus, total income received by the household in the first period is y1, and in the second, is ny2, where n is the number of children per family. Children are assumed to consume x1 in the first period of life and x2 in the second period of life when they are productive. For the moment, we consider x1 and x2 to be exogenously given (at conventional substistence levels). The difference between parents’ consumption plus childbearing costs in the first period represents savings, s.

y1 = c1 + s + nx1 (1)

In this model, savings represent only a transfer via investment from period one to period two, and no borrowing from the future is possible. As before, suppose that such investment returns R units of consumption of period two for every unit of consumption foregone in period one.

Each child consumes only x2 (£ y2). Thus, parents’ budget constraint in the second period is

ny2 + Rs = c2 + nx2 c2, s, n ³ 0 (2)

Suppose first that there is no capital market, so that s = 0, by definition, and children became the sole means of transferring consumption from the present to the future. In this case one can solve for n from (1) and (2) to get

(a) n = y1 - c 1

x1 (3)

(b) n = c 2 _ y2 - x2

Equations (3a) and (3b) can also be used to solve for c1 and c2 as functions of n:

(a) c1 = y1 - nx1

(4)(b) c2 = n (y2 - x2)

One can view (4) as defining parametrically (via n) the consumption possibility frontier of the parents in c1-c2 space. One can also substitute (3a) into (4b) to get the direct relationship between c1 and c2:

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c

y y xx

y xx

c21 2 2

2

2 2

11

(5)

This consumption possibility frontier is depicted in Figure 5.1.1.

Parents choose the point on the consumption possibility frontier (5) that maximizes their utility function u(c1, c2), a point (c1*, c2*) in Figure 5.1.1. Once they find the optimal consumption bundle (c1*, c2*), the optimal number of children n* is determined from (3a) or (3b).

Observe that an increase in the cost of children, x1, reduces the slope of the budget line in Figure 9.1 and the intercept with the vertical axis, leaving unchanged the intercept with the horizontal axis. Therefore, if c2 is not a Giffen good, then c1 falls and, by (3b), n also falls. However, the effect of a decrease in the return from investment in children, (y2 - x2) on the number of children is ambiguous. Such a change has the same effect on the budget line as before (making c2 more expensive in relation to c1) and again, c2 must fall if it not a Giffen good. However, whether n falls or rises depends on whether the decrease in c2 is proportionally higher or lower than the decrease in (y2 - x2); see (3b) since the return to their investment through children falls, families may need to invest more (i.e., have more children) even if they are content with consuming less in the future. In contrast, an increase in the parents’ endowment, y1, has a pure income effect. The consumption possibility frontier shifts upward without any change in its slope; c2 increases if it is a normal good and thus, by (3b), the number of children n, must also rise.

In general, families differ in the amounts of endowment parents have (y1) and can expect their children to have (y2). Both affect the number of children desired, but differences in the latter affect the rate of return on investment in children, so that, if an alternative means of transferring present to future consumption, such as capital markets, is available, the total number of children as well as their distribution among families may change.

If a capital market exists, in the sense of an alternative means (to children) for transferring present to future consumption, s may be strictly positive for some families. In this case, (1) and (2) may be consolidated by substituting for s in (2) from (1):

yy x

Rx n c

cR1

2 21 1

2

(6)

with an added requirement that s = y1 - c1 - nx1 ³ 0. The expression in large brackets is the net present value of having a child. It consists of a return (y2 - x2) in the future, which is worth only (y2 - x2) / R in the present, and a cost, x1, in the present. Clearly, since n does not enter the utility function, a family will have children only if

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y xR

x2 21

³ (7)

Thus, in the presence of a capital market, those families for whom x1 or x2 is sufficiently high will have no children and will transfer present to future consumption via the capital market. Families for whom the expected endowments of their children are sufficiently low may also choose to have no children. Those families for whom the rate of return on investment in children is sufficiently high will not save at all: they will hit the constrant s = y1 - c1 - nx1 ³ 0 as they try to increase n. Consequently, they will be subject to exactly the same constraint as in the absence of a capital market, i.e., equation (3), and will demand the same number of children. Since some families will have no children, total population must be lower than without a capital market. This analysis is the essence of the old age security hypothesis” [end of reproduction].

Implications of this model

This basic model can show some interesting phenomenon, such as the effect of change in y1, x1, and y2-x2,49 etc., which might make ‘intuitive’ sense. But because the model fails to deliver, in the general equilibrium context, we restrict analysis of such implications.

Critque of this model

(a) The budget constraint for the second period does not appear to treat the expense incurred on the n2 grandchildren. However, that objection can be overcome if we assume that x2 represents this expense, somehow. The main objection is that the returns from children are assumed in this model to be guaranteed returns, while this might not hold.

(b) The opening up of capital markets is seen to push fertility down to zero in this model. This is never observed, even in the advanced countries with relatively advanced capital markets.

(c) As Nerlove et al show further, in their book, this model fails to show a decline in over-all income in the presence of capital markets in the general equilibrium framework. That is essentially because those whose return from children is high, will borrow from those who do not want children, until the returns from children and assets will equalize.

Basically, therefore, treating children merely as a form of assets does not show why there should be any affect on fertility at all.

3.2.2 Attempts to incorporate uncertainty of returns (and hence the insurance aspect):

49 See Nugent and Anker (1990) for details.

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Unfortunately, I have not yet been able to find out models in the literature which incorporate children as insurance. Therefore I have tried to work out such models. The work done in this direction so far is summarized below.

Model 3.2.2.1 A basic model of children as risky assets

Here I extend the Nerlove model to incorporate children as risky assets. I assume the CRRA form of VNM expected utility function since we assume that agents wish to smooth their consumption across time.50 The function is assumed to be separable in the two periods and have all ‘nice’ properties enabling us to ignore the second derivatives. The household is modeled as a single unitary entity with utility function u c c c( , , )1 2

122

where there are two states of nature in period two, with the first state representing the probability of returns being received from the children, with a probability of l and the other representing the probability of default from the children. Then we can write the agent’s problem as

Max uc c c

1

1

1

2

11

2

2

1

1

11

1

1

l

l

( )

subject to c1 = b + y - nac1 - a - p

c21 = a (1+r) + n (P - B)

c22 = a (1+ r)

n ³ 1 (EEF, discussed earlier)

where b = bequest received by agent from his/ her parentsB = bequest given to children subject to their taking care of the agent

in agent’s old agey = agent’s income in youth (there is no income in old age)a = a parameter representing the cost of children (generally, a <1) including

the cost of education, and the cost of fertility regulation (RC)p = ‘pension,’ or consumption good given to agent’s parentsP = ‘pension’ received from childrenr = capital market return = discount factor = parameter representing risk aversion of the agent

The problem gives rise to two FOCs, w.r.t. a and n, but there is no explicit solution to these simultaneous equations. In any case, one does not expect this model to

50 Alternative forms of the utility function such as the exponential, can be tried out also.

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predict the entire set of relationships discussed earlier, since it does not quite take into account the insurance value of children.

Model 3.2.2.2 A basic model of children as risky assets and insurance

Instead of having two states of nature in the second period, we now have four states as follows:

Agent’s income Return from children Low (say, 0) YesLow No (agent starves)High (say, y2) YesHigh No

Now, we see that there is a state in which, in the absence of capital markets, and even with a negative NPV, children could provide for the agent in old age when the agent has zero income. It is the risk aversion of the agent, operating through this state, that drives the old age security hypothesis. Accordingly the model can easily be revised to incorporate four states of nature in the second period.

Model 3.2.2.3 A model of children as risky assets and insurance, and providers of ‘old age care’

We observe in the above case that if the agent’s low income status is non-zero (say, as in the developed nations), then the old age security hypothesis will eliminate the need for children completely, if the expected return from children is negative. Therefore, we now postulate the existence of another argument in the utility function, called w which represents the utility an agent gets from ‘old age care,’ a component that is not directly related to consumption, and which is assumed to be best provided through one’s own children. This will enable the model to generate a demand for children even if the children are risky, and the agent has a relatively high income in the two states of nature at time t = 2.

A question would naturally arise: from where does this argument in the utility function arise? We argue, as shown in Section 1.3 on the evolution of the old age security motive, that it arises from the fact that human beings now expect to live well into their old age when they are aware they shall be physically restricted and might even be physically handicapped: it is not just consumption that they are concerned about, in that situation, but basic things functioning and capability51 (Sen, 1992). Even if the person has the ability to purchase medicine (consumption of health), it might not be possible to put that medicine into one’s body, unaided.

We have to answer a basic question here: why is it that w is best provided by one’s own child, and not, say, by outsiders. It is here that we make use of the Hamilton 51 Functionings are “states of being and doings” such as “being healthy” and “avoiding premature mortality.” Capability is the set of vector of functionings available to a person.

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kin rule (Hamilton, 1964) according to which, one ‘cares’ about people in the proportion of the genetic relationship we have with them. We summarize the coefficients of relationship between kin below:

Parent - child 1/2Full siblings 1/2Half siblings 1/4Grandparent-grandchild 1/4Aunt or Uncle-nephew or niece 1/4First cousins (under monogamy) 1/8

This seems to be at the source of the ‘weak hardwiring for sense of duty’ (Wilson, 1993) that we discussed earlier, and it is this that parents are able to make use of to instill a ‘sense of guilt’ (Becker, 1993) in their children if the children do not care for them. While siblings are a good alternative source of w as per this argument, one knows that (a) siblings have their own families to ‘look after’ and (b) siblings have the same expected life span; hence it is improbable that they will be around when one is infirm. The operation of this rule is clearly observed in day-to-day life, and we do find that ‘outsiders,’ even if they are well trained nurses, are not expected to provide the kind of care that family members are expected to provide. This does not rule out the moral hazard or ‘default’ problem from children, but it does show why one’s own children are strongly preferred to ‘non-kin’ nurses in old age homes, as providers of care.

Accordingly, the above model is modified as follows. The utility function now looks like this: u c c c( , , , )1 2

122 w . We will have the four states of nature as above.

Additionally, in each of these states, there is the further uncertainty about receiving old age care (which is distinct from pension). Therefore, it is possible that children might pay a ‘pension’ P but not provide w, while there is also a possibility that children might not pay any pension but provide w.

If income and insurance risks were reduced as a result of economic growth and old age home were to become perfect substitutes for children as providers of old age care, then this model would also drive down fertility to n = 1. However, there is sufficient reason to suppose that old age homes will always remain imperfect substitutes for children.

Model 3.2.2.4 Building other relationships/ complexities

a) We can add child mortality m, which can be subtracted from n in the second period. The expectation of m is exogenously formed.

b) We can add human capital investment through a, thus making P a function of a.

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c) We can model P and w more clearly as functions of the possible bequest that the child might receive, i.e., P(a, B) and w(B). A functional relationship can be postulated which shows greater P as a and B increase.

d) Uncertainty in a can be incorporated, since the assumption of a riskless asset considered so far is not quite realistic. This assumption adds to the risk, and hence to the demand for children, but it could perhaps be incorporated as a part of Model 3.2.2.2.

e) A constraint could be added whereby the expected NPV of returns from children is negative (it could be positive in some cases, but its average is negative). This would match the observations of most studies.

f) The effect of the pension system on fertility can be studied by subtracting a tax, t, from income in the first period, and adding Pg, government pension, to income in the second period. Some agents might lose and others gain, from this pension, subject to an overall inefficiency loss (i.e., Pg/(1+r) - t < 0 in all cases). The agent, at the time he is planning to have children, might not know to which category he shall belong. This will introduce another uncertainty into the second period returns. Alternatively, one could introduce aspects of adverse selection in terms of increasing the costs of insurance (and hence the tax rate) for peasants.

g) Extension of the above model to general equilibrium frameworks will be useful, particularly when we allow a greater role for capital markets.

Numerical simulation

As can be seen, with increasing complexity, the model will become more and more intractable. However, it should be possible to use various software (such as GAMS) to carry out nonlinear programming and to arrive at numerical solutions for plausible parameter values and thus to plot the relationships between the variables and fertility. It is hoped that a basic theoretical model will be possible to work out on these lines which will support most of the relationships hypothesized in Section 3.1.

Advantages of this model

1. Compatible with many stylized facts of evolutionary biology.

2. Explains stylized facts of fertility, including lower limit.

3. Compatible with stylized facts of economic development: accounts for man-made institutions designed for old age care.

3.3 Complexities

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It is easy to see that the above discussion has not even scratched the surface of the complexity that exists in the inter-relationships between variables. For example, we have not been able to capture the dynamically changing decision when expectations both of longevity and of incomes of children get revised upward (as in a society like Thailand). We have not been able to capture the relative risk aversion of the male/ female partners to the fertility decision. The dynamic changes caused in almost all variables are not caputured in this model. There is also the complexity of moral hazard added on when there are too many children. It is possible that some children might free ride on the care being provided by their siblings. And so on.

However, this basic theoretical model can be taken as a starting point, and it should be possible to arrive at results, by adding sufficient complexity, closer to what is observed in reality.

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PART II

EMPIRICAL ANALYSIS

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Chapter 4The Setting of the Surveys, and Preliminary results

This chapter outlines the kind of study/ data that shall be necessary to build up in order to gain a better understanding of the societies in Costa Rica and Thailand. This will require not only understanding the demographics of these nations, but also their society and culture, especially in relation to the family.

4.1 Thailand

The material included here has not been edited thoroughly yet. Much of it has been merely re-arranged and classified after being downloaded from various web sites on the internet. Therefore it should be taken only as an indicator of the kind of work that needs to be done.

The country’s setting and its people

The Kingdom of Thailand, known as Siam before 1939, and situated in the west of the Indo chinese Peninsula of Southeast Asia, has remained the only nation in the region that was never colonized. Area With an area of 198,115 square miles (513,115 square km), and population, in 1993, of about 57,829,000, it is one of the middle-sized nations in Asia.

Thailand is divided into 4 geographical regions and 76 provinces (Changwat), 699 districts (Amphoe), 85 sub-districts (King Amphoe), 6,905 communes (Tambon), 62,994 villages and 132 municipal areas. The four primary geographic regions - Central, Northern, Northeastern, and Southern. The Northern and Northeastern are the largest in terms of area (Knodel, Chamratrithirong and Debavalya, 1987).

a) North Thailand (also called Lanna Thai) is basically a mountainous region comprising a series of parallel and mountain ranges (average elevation 3,900 feet above sea level) and the valleys of the Ping, Wang, Yom, and Nan rivers. These ranges are covered with thick tropical monsoon forests. The people speak a dialect of the Thai language called Kham Mu’ang, or Yuan in its written form, and follow Buddhist traditions more akin to those practiced in Myanmar. The mountains of the north also are the home of many upland minority groups that have migrated from Myanmar, Laos, and southern China over the centuries.

They also share a preference with the Lao-speaking Thai of northeastern Thailand and the people of Laos for glutinous rice as their staple food.

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Some of these Northern tribes have a particularly high fertility despite having a low infant mortality rate (e.g., the Hmong poipulation),52 but we shall not particularly investigate these tribes in this paper.

b) In the northeast (also called the Isan region) is the Khorat Plateau, a sandstone tableland of low elevation with poor soil and scant rainfall. This region - with a particularly poor terrain - has the lowest living standard among the four regions of Thailand. This region shares various linguistic, artistic, and religious traditions with Lanna Thai and the Lao across the Mekong River. The regional dialect is referred to as Lao or Isan, but most people can easily communicate in standard Thai.

c) The central plain region, forming the Thai heartland, consists of the Chao Phraya River delta. This river - along with its tributaries - plays an extremely important role in Thailand’s economic life. The Central region is the richer and politically powerful region where two previous Thai capitals - Ayutthaya and Thon Buri - were located. Bangkok was established in 1782 as the capital by the Chakri Dynasty. This region is the core cultural region of Thailand, and its people (often called the Siamese) speak the national language - standard Thai, or Siamese. Historically, the Siamese followed a Buddhist tradition that has been more closely linked to that of the Khmer of Cambodia.

d) Southern region:

* The southeast, lying close to the sea, is an undulating and hilly region extending eastward from Bangkok to the Cambodian border. Sino-Thai, or Thai of Chinese descent, are a prominent segment of the regional population, their ancestors having originally settled there in the late l9th century to work on sugarcane plantations, in lumber mills, and as small merchants. There is also a significant number of people living along the border with Cambodia who speak Khmer or Khmer-related languages and follow distinctive traditions.

* The southern Pak Thai region has a distinctive identity linked to the historical role of such towns as Nakhon Si Thammarat, once called Ligor. Because this background is related to the later Siamese kingdoms, the language and customs of Pak Thai are similar to those of the Siamese of central Thailand. The extreme south is inhabited by Malay-speaking Thai, most of whom are Muslim.

Government

Thailand is a constitutional monarchy with a parliamentary government that, since 1932, has largely been dominated by the military. The hereditary king is head of state and commander in chief of the armed forces. Legislative power resides in a 52 An example is a study by Kundstadter, et al (1993) of the Hmong population in Northern Thailand where the status of women is relatively low.

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bicameral National Assembly, consisting of the 270-member Senate and the 360-member House of Representatives. Senators are appointed to six-year terms on the recommendation of the incumbent prime minister, and members of the House are directly elected to four-year terms. The head of government is the prime minister, who is required by a 1992 constitutional amendment to be an elected member of the House of Representatives. The prime minister names a Council of Ministers (cabinet) for appointment by the king. A multiparty system operates, and there is no dominant party or coalition other than the military.

The economy

The process of modernization in Thailand was speeded up during the period immediately following the 1932 Revolution and particularly after World War II. Rapid socioeconomic change occurred throughout Thailand in the 1960’s with the introduction of a new mode of production: industrialization. The new type of economy helped to increase the standard of living and to modernize the country at a fast rate. In addition to this, close contact with Westerners and western countries has brought about changes in social life style, attitudes, and values of the Thai population in modern times (Limanonda, 1995). Today, Thailand is a market economy based largely on services, light industries, and agriculture. Agriculture accounts for about one-eighth of the gross domestic product (GDP) but employs more than half the workforce. Small landholders predominate through most of the country. Manufacturing industries account for one-fourth of the GDP but employ only one-tenth of the work force, mostly concentrated in and around Bangkok - which is the primate city.

Social-welfare programs are meagre but include assistance to children, families, and the old and indigent and disaster relief. Education is free and compulsory between the ages of 7 and 15.

Religion

Theravada Buddhism is predominant and is accepted as the state religion in Thailand. Approximately 95 percent of Thai population are Buddhists. At present there are approximately 30,000 Buddhist temples all over the country, over 200,000 monks and more than 100,000 novices (Wasi as cited in Phongphit, 1988). The application of the Dhamma, the Buddha’s principles, is vast in all kinds of organization in the society. Changes in the traditional society

a) The Family System

“The emergence of family types in Thailand is closely related to patterns of postnuptial residence; these patterns are found to vary widely in different regions, and between rural and urban areas.

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“Neolocal residence is the most prevalent type found in urban areas of all regions, while a smaller proportion of rural couples do the same. Among couples who do not establish their own residence after marriage, living with husband’s parents (patrilocal residence) is found to be most prevalent in the urban South, the Central region, and Bangkok. This reflects a large proportion of Chinese in these areas. On the other hand, living with the wife’s mother (miltrilocal residence) is more common in other urban areas. This pattern of residence is most pronounced in the rural Northern and Northeastern regions (Limanonda, 1979). The duration of coresidence after marriage in these two areas is not fixed. The practice is that newly married couples may live anywhere, but they are expected to, and commonly do, live in the bride’s parental home for a year or two until the first child is born, or the next daughter marries. Then, the couple becomes independent. Thus, a family’s daughters leave their natal family one by one through marriage. The last daughter usually stays on, looks after the parents, and inherits the land and house after the parents’ death (Mizuno, 1968; Lux, 1969 as cited in Limanonda, 1979)” (from Limanonda, 1995).

Evidences from several anthropological studies has suggested that a nuclear family structure in Thailand is not the starting point of family life of the different types of residence after marriage. Given the nature of coresidence norms in Thailand, the emergence of various types of residence has its own development process through different social and cultural structures. The composition of any particular household usually varies over time, depending on the life cycle stage of the family. It has been cautioned, however, that cross-sectional data on household structure, such as censuses, usually mask the dynamic processes of households, and must be nterpreted in terms of the development cycle (Knodel, Chamratrithirong, and Debavalya, 1987).

The Thai family, in fact, manifests three stages of family formation. In the first stage, a family has started with a nuclear type, consisting of a father, a mother, young unmarried children, and sometimes one or more grandparents. The second stage occurs when young newly-married children form a sub-unit in the parental household. Therefore, the household becomes a small extended family. The last stage develops when the next daughter of the family gets married, or when the other couple has their first child and moves out to set up their own household. With this cyclical development, a once-nuclear family may become an extended family (Prasithrathsin, n.d.).

The development of family formation is consistent with changes in the ages of heads of households. For instance, stem families are very rare for households headed by younger persons but constitute the majority of those headed by someone 60 years or older (Knodel, Chamratrithirong and Debavalya, 1987). Phananiramai’s examination of data from the 1989 Labor Force Survey (1991) found that nuclear households were mainly headed by males aged between 36-60 years old (mean age was 41 years). Approximately 92% of these heads were married. The rest were either widowed, separated, or divorced.

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Changes in this pattern: “In traditional times, married daughters and their husbands lived with the wife’s parents. When the married couple’s children were old enough to help with household work and farming, the married couple would move to establish their own household on the family compound. Several married couples would reside in the parental house at the same time if the parents had a number of daughters. ...

“In the contemporary period, since 1945, this pattern of residence has still generally been adhered to. However, the stem family household appeared during this period, in which there was only one married child in each generation that resided in the parental household. When a young couple married,they lived with the wife’s parents and if one of the wife’s younger sister marries, the elder married sister and her family would then leave the parental household and establish a new one. This pattern continued until the youngest sister was married.53

“In the future, while it may become more common for children to leave their elders alone until perhaps age 75 or so, it may be anticipated that those children will still try to do what they can to care for their elderly parents (Caffrey, 1992). This may be largely due to strong value of filial obligation in the Thai culture and it continues to be cultivated through the Buddhist teachings which advocate care and support of the elderly (Phillips, 1992). page 7 (from “Patterns of Support Among Children to Old Parents”)

Household size: “Phananiramai (1991) has calculated the average Thai household size. She found that on average, a household consists of 5 members. Once the households are classified according to different types, it is found that nuclear families are the smallest (4.4 members on average), while vertical extended families are the largest (6.3 members). An extended household has approximately 5.8 members, and a primary - individual household consists of 3.4 members on average. The latest results obtained from the 1990 census indicate that the average household size is 4.4 persons, which is a decreasing size compared with the size of 5.2 in 1980. These changes occurred in every region of Thailand. The household size was still highest in the Northeast (about 4.7 persons). The average size of households in the North, the Central region (excluding Bangkok), and the South ranged between 4.1 and 4.6 persons (Thailand, National Statistical Office, 1991a). These declines in household size compared to data available in 1960 suggest a relationship with the changes in demographic composition already mentioned. Demographic change and in particular, the change in population structure, has had affects on the family structure.54

b) Extent of son preference

53 There is a possible list of reasons for this, as discussed in “Patterns of Old Age Support …”54 More information in Limanoda, 1995.

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“In general, there is little son preference in Thailand. The overwhelming majority of parents express a desire to have at least one child of each sex. Sons are valued because they may enter monkhood, thus bringing merit to the parents. Daughters are valued because they often co-reside with parents after marriage, and the youngest daughter is normally responsible for caring for elderly parents. Some degree of son preference is found for some sub-groups: in the South region, due mainly to the Muslim population, and in urban areas, due mainly to the Chinese population. Less educated women are also less likely to use contraception if they have no living son as compared with more educated women” (from Background Country Paper: Thailand). Wongboonsin, and Ruffolo (1995) have studied the sex preference for children in Thailand in some detail.

c) Age at marriage

“Data available from 1947 to 1980 indicated that changes in marriage patterns have occurred in Thailand although at a slower pace than some other countries in the same region. There has been a trend toward an increase in the proportion who are single, the postponement of marriage, and the increase in the age at marriage. This is particularly true among the population in the capital city, Bangkok. For instance, the available data from two censuses (1970 and 1980) indicated that the singulate mean age at marriage of Thai women in t970 was 21.9, and it increased to 22.5 in 1980. The highest average are at first marriage in 1980 was 25.9 years among females in Bangkok, followed by 23.4 for the Central region, 22.0 for the North, 21.9 for the South, and 21.6 for the Northeastern region (Thailand, National Statistical Office, 1982 as cited in Limanonda, 1987)” (Limanonda, 1995).

d) Inheritance pattern

“The traditional Thai pattern is for assets to be transferred from father to son-in-law, since the norm is for the daughter to remain in the home after marriage. Though there is widespread belief that children of both sexes should inherit equally, the daughter who remains in the parental home normally inherits the house and the parental part of the family land (that has not already been transferred to other children). With land scarcity there is a tendency for sons and daughters to inherit more equally” (from Background Country Paper: Thailand).

e) The Elderly

“In a ‘hierarchically ordered’ society like Thailand, the elderly are usually awarded the highest status within the family. The strongest indication of deference to the elderly is found in the kinship system, especially in the terminology used to reflect superior-inferior status (Smith, 1979). The aged, in general, are highly regarded by the younger people. They are considered to be people highly experienced in life who could provide advice, consultation on family matters, and life in general. They are also considered to be important in

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transmitting old ethics and values to younger generations. Respect for the aged is based partly on wealth, knowledge, and sanctity as well as on age. Also. deference for an older person may depend on his position in a specific relationship, such as a father-son or teacher-student relationship (Sharp, 1953 as cited in Smith, 1979). However, it is quite interesting that in many cases, age alone does not guarantee respect of the elderly by younger people. Results from one of the studies on the Thai family conducted in 1990 revealed that young people of today are more modem-minded. As a result of their education and economic independence, they tend to obey their elders to only a certain extent. About half of the respondents in this study (341 cases) were opposed to the idea of total submission when the elderly person is seen doing or behaving wrong (Wongsith, 1991). “For Thais, besides being taught from a very early age to pay respect to the elderly, one of the prime responsibilities placed on children is to take care of their parents in their old age, a prominent feature of the Thai concept of family and making merit to their deceased parents so as to exhibit filial piety. This kind of practice is still relatively strong in Thai society, especially in the rural areas (Thailand, the National Identity, Office of the Prime Minister, 1991). “ … because of rapid changes of social and economic development, urban lifestyles, and out-labor migration from rural areas, it has been observed that the traditional practice of providing care for the elderly within the family has been affected to some extent. The elderly, especially those in rural areas who are in the lower economic strata or do not have children to support them, have begun to face hardships in both social and economic situations. This is because in Thailand there has been a lack of or an insufficient social security and welfare system to support the aged. It is important for policy planners to design appropriate measures to care for the elderly in terms of living arrangements, health care, and social and financial security (Chayovan, Wongsith and Seangtienchai, 1988).” (from Limanonda, 1995).

“Elderly people in Thai society are highly respected; they have always had the highest status in families and communities, especially in the rural areas. ... grandparents represent the familial base, particularly in extended families. In later life, they are key nodes in the village social system and they are efficient in activating community social resources for community development works (Yoddumnern, 1992). Furthermore, they contribute to the socialization of their grandchildren.

“In addition, reliance on children in old age remains a deeply rooted cultural expectation in Thai society (Knodel et al., 1987). This expectation involves repayment for the care that parents give children when they are young. Repayment includes both economic and non-economic aspects such as care during illness. The rural Thai family life cycle, especially in the Northern and Northeastern regions of the country, supported this system of reciprocity. After

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daughters marry, they usually bring their husbands into the family and cultivate their parent’s land. ...” (from Background Country Paper for the OAS survey: Thailand).

Demographics

Ethnic composition

Thailand’s population is relatively homogeneous, with about 80 percent of the total population being ethnic Thais of which more than 95 percent are Buddhists. The major minority groups are the Chinese - located mostly in Bangkok and urban areas, and the Malays, who live primarily the Southern provinces. “Indigenous minorities include the hill-dwelling Karen; the Semang, who live by hunting with blowpipes and spears; and the Lawa, who are believed to be the original dwellers of the delta plain. The Khmer, Soai, and Indians make up small immigrant groups. By the mid-1980s there were some 380,000 refugees in Thailand from Myanmar, Vietnam, Laos, and Cambodia.”55

Population Size

“During the twentieth century, Thailand has experienced a relatively rapid rate of population growth due to a rapid decline to mortality that preceded and then accompanied a decline in fertility. From a population estimated to be approximately 8 million at the time of the first census in 1911, Thailand grew to approximately 54.5 million by 1990 (The total enumerated population on April 1, 1990 was 54,548,530 persons).

“During the 20 years after the declaration of a national population policy in 1970, Thailand’s population growth rate has substantially declined. The rate has declined from about 3% during the late 1960’s to about 1.4% per annum at present. This demographic change is due mainly to more widespread contraceptive use among Thai ever married women who are in the reproductive ages, and a strong commitment by the Thai government to reduce fertility and control the size of population” (from Limanonda, 1995).

The sex ratio which is defined as the number of males for every 100 females in the population was 98.5. This indicates that females were slightly more than males.

In comparisons of the population among regions (Table 1), it is apparent that the Northeast was the most populous region with the poplation of 19,038,497 persons, followed by the Central Region (excluding the Bangkok Metropolis), the North and the South respectively. The population of the Bangkok Metropolis was 5,882,411 persons.

The overall population density was about 106 persons per square kilometer. The region that had the highest density was the Central Plains with 118 persons per square kilometer, followed by the Northeast, the South and the North woth a density of 11,399 55 Britannica Online (from the www site).

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and 62 persons per square kilometer respectively. The density of the Bangkok Metropolis was 3,758 persons per square kilometer. The average size of household for the whole kingdom was about 4.4 persons. The average sizebetween municipal and non-municipal areas was not much difference of about 4.2 persons and 4.4 persons respectively.

Due to population momentum, although the replacement level of fertility could be maintained, the size of the Thai population in the year 2025 may be as big as 80.9 million, an increase of 25.2 million within the period of 35 years after 1990 (Leoprapai, 1991-92).

Fertility

Thailand’s total fertility rate has dropped to near replacement level in a generation; the TFR dropped from 6.3 in 1965 to 2.4 in 1989.56 57

“The North region was the first to show fertility decline, starting in the late 1950s. This is due in part to the scarcity of land in the region. The Northeast has lagged behind the North in fertility level, and the South has consistently had the highest level mainly due to the Muslim population. A recent study found that individual-level fertility determinants are similar across all four regions but that community-level determinants vary. Variables measuring women’s status have a large impact in the North and Central regions while those measuring population pressure have an impact in the Northeast and South. Family planning program variables have a large impact in the South (Chamratrithirong et al, 1989).” 58

“In general, the fertility decline in Thailand is pervasive, with little difference found by rural/ urban or educational group distributions. A recent study found that women’s status variables did have an impact on fertility at the regional level, but variables measuring children’s school status and contribution did not have an impact” (from Background Country Paper for the OAS survey: Thailand).

Ever-married women aged 15 years and over born an average of 3 live births. The average number of children ever born in municipal areas was 2.5 live births and 3.1 live births for non-municipal areas.

Age at marriage

56 In 1965-69, the TFR in Thailand was 6.59, and in 1987 became 3.09 (Contraceptive Use Prevalence Survey, 1987. Institute for Population and Social Research, Mahidol University).57 An alternative figure: “The total fertility rate (TFR) has fallen from about 6.3 during the early 1960’s and about 5.1 in the early 1970’s to about 2.1 in 1987. According to the latest projection, the TFR will be as low as 1.95 by the end of the twentieth century” (Limanonda, 1995).58 From Background Country Paper for the OAS Survey: Thailand.

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Considering the time exposed to childbearing, it is seen that the singulate mean age at marriage (SMAM) of women was about 24 years. The data also shows that women in municipal areas were married later than those in non-municipal areas. The proportion single among women in the reproductive ages of 15-49 years in municipal areas was markedly higher than that in non-municipal areas. (45.9 percent for municipal areas compared to 29.7 percent for non-municipal areas).59

National Population Policy and Family Planning

Phyormyont (1992-93) has discussed the population policy of Thailand in some detail, and shows how earlier population policies tended to be policies aiming at increasing the size of population through pronatalist and public health measures. Before 1970, population growth rates were about 3%. In March, 1970, the government eventually issued the first national population policy statement “supporting family planning through a voluntary system, in order to resolve various problems concerned with the very high rate of population increase, which will constitute an important obstacle to economic and social development of the nation.”60 The first five-year family planning program was included in the health plan of the Third National Economic and Social Development Plan (1972-1976). From the Fourth National Economic and Social Development Plan (1977-1981) onwards, population policies were made more comprehensive to cover all dimensions of population: population growth, quality of population and population distribution and human settlements. Since the introduction of the national policy, the impact of contraceptive use on reducing the fertility of Thai women has been significant.

During 1970-1990, the service statistics, consistent with findings from various periodic surveys, indicated that the number of new acceptors entering the program has grown steadily since its inception.

Contraception use

The contraceptive prevalence rate (CPR) was estimated to be about 8% during 1963-1969. “Evidence from a series of national surveys confirmed the fact that a substantial decline in fertility in Thailand is due chiefly to changing reproductive behavior within marriage, and in particular a dramatic increase in contraceptive use. There was an attempt to estimate the contribution to the change in the TFR of Thai women during the decade 1968-1978 due to each of the four proximate variables: contraceptive use, the proportion married, induced abortion and postpartum infecundibility. The results indicated that the increase in contraceptive prevalence made a far greater contribution to the decline in fertility than did any other variables during this entire decade (Knodel, Chamralrithirong and Debavalya, 1987)” (Limanonda, 1991).

Approximately 66.7 percent of currently married women aged 15-49 years were practicing contraception. Among women in ono-municipal areas, the proportion currently 59 From a Thai university’s web site.60 CICRED, 1974:5.

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using was higher than their counterparts in municipal areas (68.1 percent compared to 60 percent). The most popular method was female sterilization being used by about 24.4 percent, followed by oral pill (24.2 percent), infection (9.5 percent), and IUD (4.8 percent) respectively. The proportion of currently married women aged 15-49 years reported practicing contraception was highest in the North (74.5 percent), followed by the Northeast, the Central and the South respectively. The Bangkok Metropolis the contraceptive prevalence rate was about 58.5 percent.61

It has been estimated that approximately 70% of Thai ever married women use one kind of contraception or another (Bennett et al., 1990). This is confirmeed by Knodel, Chamratrithirong and Debalaya 1987, by the Contraceptive Use Prevalence Survey 1987, and by the National Statistical Office 1989.

Mortality and Life Expectancy

“Mortality has dropped to the lowest Level ever, at about 5-6: 1,000 population. This reflects in the increasing life expectancy of both male and female population” (Limanonda, 1995). The average life expectancy is relatively good, at about 66 years.

Population Distribution

Population distribution between municipal areas and non-municipal areas was considerably unbalanced. About 81.3 percent of the population was the inhabitants in non-municipal areas while only about 18.7 percent were those residing in municipal areas. The census results in table 8 shows that, the total population in Thailand of 54,548,530 persons, about 91.9 percent were born in the region of current residence, 7.7 percent were born in other regions, and about 0.4 percent were born in foreigncountries.62

Table A. Major characteristics of the population by area.

----------------------------------------------------------------------------- Population characteristics Total Municipal Non-municipal area area-----------------------------------------------------------------------------

Age and Sex Structure

Total population 54,548,530 10,215,098 44,333,432Sex ratio 1 98.5 93.4 99.7Percentage of population agedunder 15 years 29.2 23.3 30.6Percentage of population aged15-59 years 63.4 70.3 61.8Percentage of population aged60 years and over 7.4 6.4 7.6Dependency ratio 2 57.7 42.2 61.8

Fertility

Average number of children ever bornper ever-married women aged 15 years

61 From a Thai university’s web site.62 All this information is from a university’s web site, including the table below.

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and over 3.0 2.5 3.1Percentage of single women aged 15-49years 33.3 45.9 29.7Singulate mean age at marriage offemale (SMAM) 3 23.5 26.5 22.6Percentage of currently married womenaged 15-49 years practicingcontraception 66.7 60.0 68.1

Population Distribution

Percent distribution of population inmunicipal and non-municipal areas 100.0 18.7 81.3Percentage of persons were born inthis region of current residence 91.9 73.9 96.1

-----------------------------------------------------------------------------

1. Sex ratio = Number of male population * 100 Number of female population

2. Dependency ratio = Number of population aged under 15 years and 60 years and over * 100Number of population aged 15 59 years

3. Singulate mean age at marriage (SMAM) is calculated from the proportion of single women.

Literacy.

It can be seen from the Table that about 93 percent of the population aged 6 years and over were literate. Male literacy was relatively higher than female literacy, 94.8 percent for males, as opposed to 91.3 percent for females. The literacy rate in municipal areas was higher than that in non-municipal areas, 96.7 percent and 92.2 percent for municipal areas and non-municipal areas respectively. It should be noted that the literacy rate were above 90 percent for all regions, except for the Northern region where the literacy rate was 88.6 percent.

School Attendance and Educational Attainment.

Population aged 6-29 years who were enrolled in school at each educational level were approximately 37.2 percent of those 6-29 years of age. The proportion of those who were attending school was higher in municipal areas, about 45 percent for municipal areas and 35.4 percent for non-municipal areas.

With respect to educational attainment, the results reveal that only about 18.5 percent of those aged 6 years and over attained more than primary school. The findings also show that the proportion of those who attained more than primary school in municipal areas was considerably higher than that in non-municipal areas (44.4 percent for municipal areas, as opposed to 12.5 percent for non-municipal areas). Considering sex differentials in school attainment, it is apparent that the proportion of males who completed more than primary school was higher than that of female counterparts (20.9 percent for males compared to 16.3 percent for females). At the regional level, the proportion attained more than primary school level was highest in the Bangkok Metropolis (47 percent), followed by the Central, the South, the North and the Northeast respectively.

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Table B. Social characteristics of the population by sex and area.

----------------------------------------------------------------------------- Social characteristics and sex Total Municipal Non-municipal area area-----------------------------------------------------------------------------

Percentage of literate persons aged 6 years and over Total 93.0 96.7 92.2 Male 94.8 97.8 94.1 Female 91.3 95.7 90.3

Percentage of school attendance of the populationaged 6-29 years Total 37.2 45.0 35.4 Male 38.0 46.9 36.0 Female 36.5 43.2 34.8

Percentage of persons aged 6 years and over whoattained more than primary school Total 18.5 44.4 12.5 Male 20.9 48.4 14.7 Female 16.3 40.7 10.4

-----------------------------------------------------------------------------

Occupation

31,296,805 persons 13 years of age and over were employed. The largest number of these (67.3 percent) were agricultural, animal husbandry and forest workers, fishermen and hunters. 11.2 percent were craftsmen, production workers and laborers, and 7.7 percent were sales workers.

When consideration is given to employed persons in municipal areas, the pattern of occupation differred from that of the whole kingdom. In municipal areas, about 25.6 percent of the total employed in municipal areas were professional, technical and related workers. However, it is found that the occupation patterns of population residing in non-municipal areas and of employed males and females were similar to the occupational patterns in the whole kingdom. Occupation by region reveals that the patterns of occupation were similar among all regions. Most were involed in agricultural sector. The Central Region constituted the lowest proportion in agricultural sector (54.9 percent), but the proportion of other regions were above 70 percent.

For the Bangkok Metropolis, craftsmen, production workers and laborers ranked the highes (29 percent). Next were sales workers (19.5 percent), professional, technical and related workers (14 percent).

Considering economic activity of population aged 13 years and over during the week prior to the cencus date (25-31 March, 1990), it is found that 41,016,701 persons or 75.3 percent of population aged 13 years and over were economically active (inculding those who were employed, looking for work, and waiting for farm season). Table 20 depicted that about 24.7 percent were those who were non-economically active (including housewives, students, unable to work, etc.). Proportion of male who were economically active was higher than that of females (82.9 percent for males compared to 68 percent for females). With respect to regions, the percentage of those who were

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economically active were over 70 percent for all regions except the Bangkok Metropolis which was only 65.5 percent.

Table C. The percentage of employed population aged 13 years and over by last year occupation, sex and area. (Occupations ranked in the order of percentages) ------------------------------------------------------------------------------ Major occupation group Total Municipal Non-municipal area area------------------------------------------------------------------------------ Total1. Agricultural, Animal Husbandry and Forest Workers, Fishermen and Hunters 67.3 a 79.42. Craftsmen, Production Workers and Laborers 11.2 25.6 8.43. Sales Workers 7.7 23.1 4.74. Professional, Technical and 4.2 14.0 2.3 Related Workers a 10.1 a5. Service Workers

Male1. Agricultural, Animal Husbandry and Forest Workers, Fishermen and Hunters 65.2 a 77.42. Craftsmen, Production Workers and Laborers 12.9 29.2 9.53. Sales Workers 5.9 18.0 3.44. Professional, Technical and Related Workers 3.9 11.6 2.35. Transport Equipment Operators and Related Workers a 10.4 a

Female1. Agricultural, Animal Husbandry and Forest Workers, Fishermen and Hunters 69.6 a 81.52. Sales Workers 9.7 29.1 6.23. Craftmen, Production Workers and Laborers 9.4 21.4 7.14. Professional, Technical and Related Workers 4.6 16.9 2.45. Service Workers a 13.3 a------------------------------------------------------------------------------

Symbol “a” means the lower percentage or lower ranking order than thoseshown in the column.

Age Structure

During the past 30 years, the many changes in Thailand’s society and economy have been closely correlated with its demographic experience. Falls in mortality from the late 1940s, particularly among infants, have brought a very high rate of population growth. A greater number of births have been seen in each decade, until very recently, and this alone will generate an increasing population of old people well into the future. Since the 1960s, there has been a rapid decline in fertility, largely due to contraceptive use. This has begun to increase the elderly population as a share of the national total. The vast dramatic decline in fertility has profound implications not only for the age structure of the Thai population, but also for the support arrangements of the ever-growing elderly population in Thailand. The ratio of adult children to older parents, which is one consequence of particular significance, will certainly decrease over time. The implication is that the fertility decline will result in fewer traditional care providers, hence restricting old age support options for future generations of elderly parents” (from “Patterns of Support Among Children to Old Parents”).

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The population in the young ages of 0-14 year was about 29.2 percent of the total population in 1990. Those in the working ages of 15-59 years were about 63.4 percent and approximately 7.4 percent were those in the old ages of 60 years and over. Regarding regional differentials, the Northeast had the highest proportion of population in the young ages, while The Bangkok Metropolis had the lowest proportion of the young age, and the highest proportion of the working ages. The highest proportion of population of those in the old ages was found in the Central Region.

“Demographic changes, and particularly a rapid drop in fertility, have brought about changes in the population’s age structure. The size of the population aged under 15 has declined from 43% in 1960 to 33% in 1990 and is expected to be as low as 27% at the end of this century. At the same time, the size of the population in the labor force will increase from 52% in 1960 to 66% the year 2000. This is due to the high population growth rate in the past 3-4 decades. The proportion of old people also will grow, although at a slower pace, from about 54b in 1960 to about 8% by the year 2000 (Limanonda, 1991).

“As a result of the fertility decline which is the most important determinant of age structure, the proportion of elderly people (60 and above) and the adult people (15 to 59 years) has been gradually increasing since 1970, while the younger people (0 to 14 years) has been decreasing over time. Based on these trends, the elderly people in the next 50 years will increase to a very much larger proportion than at present. In addition, another indicator of population aging is the change in the elderly dependency ratio (the number of person aged 60 and over per 100 persons 15-59 years). In Thailand, the elderly dependency ratio will also increase from 11.4 in 1990 to 16.8 in 2015 (calculated from Population Projections for Thailand 1980-2015).” (from “Patterns of Support Among Children to Old Parents”).

“The elderly population of Thailand is growing much faster than the population as a whole. Between 1991 and 2020 Thailand’s total population will increase by about one-third, but the population aged 55 and over is projected to more than triple, adding 11 million older men and women, almost half of whom will be 65 and older. Currently, 9.7 per cent of the population of Thailand is aged 55 and over (Table I). Thailand now has higher proportions of people in older age groups relative to other countries in the region; with the exception of Singapore (where more than 12 per cent of the population is aged 55 and over), Thailand is the “oldest” country in Eastern South Asia. Projections to the year 2000 imply that 22 per cent of the population will be aged 55 and over, making the Thai elderly one of the fastest growing older populations in Asia” (from the Parental expectation article).

“Another indicator of population aging is the change in support ratios - the number of ‘dependent’ persons (children under age 20 and / or adults 65 years and over) per 100 persons in the ‘productive’ ages (20 to 64 years). In 1991 the total support” (from Parental expectation article, p.90).

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The age dependency ratio, which is the ratio of persons in the dependent ages (under 15 years and 60 years of age and over) to those in the working ages (15-59 years), was 57.7. In other words, there were about 58 persons in the dependent age for every 100 persons in the working ages. Considering the age dependency ratio among regions, the South had the highest age dependency ratio (66.9), and the Bangkok Metropolis had the lowest age dependency ratio of about 37.9.

Empirical evidence on old age care

1. Results from questions on support of old age from fertility surveys

“Expectations about support in old age from those currently in the childbearing years are found in two fertility studies (SOFT, 1977 (1) and Knodel, Chamratrithirong and Debavalya, 1987 (8).

“SOFT found that expectations of reliance on children in old age were nearly universal: 88% expect to rely on their children and 84% expect to live with their children. Old age support as a fertility motive was found to be less important in cities and among higher status (more educated) respondents. In part this is due to the fact that less educated respondents were more likely to mention the more immediate benefits or short-term contribution of children.

“In studying Thailand’s reproductive revolution Knodel, Chamratrithirong and Debavalya found that reliance on children in old age remained a deeply rooted cultural expectation even among those currently in the childbearing years. This expectation involves both repayment for the care that parents give children when they are young and that children make merit which is reflected on the parents. Repayment includes both economic and non-economic aspects, e.g., care during illness. There was a recognition that such repayment was becoming monetized along with the rest of the economy, i.e., that children would contribute money rather than labor to the household. Some expressed concern that it is necessary to have several children to insure that there is one child who is dependable to care for parents in their old age. But the main feeling expressed was that having few children who were well educated was ultimately more beneficial both to parents and children” (from Background Country Paper: Thailand).

2. Traditional care of parents

“In Thailand, the national study on Socio-economic Consequences of the Aging of the Population (Chayovan, Wongsith and Saengtienchai, 1988) found that Thai elderly live in either nuclear or extended households. More than half of the elderly, 57 per cent, reside in stem households. While most aged people, therefore, live with their children, approximately one-fifth said they feel neglected. The reason behind this appears to be the out-migration of young people to the main cities in search of jobs, mainly as unskilled laborers. Some return to their villages during harvest season while others work full-time in the

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city. Hence, many elderly people are left behind, often to care for small children” (from Background Country Paper: Thailand, p. 11).

Evidence collected in the study by Chayovan, Knodel, and Siriboon (1992) shows that “the proportion of elderly parents living with their children decrease when they get older; however, 80 per cent of the elderly parents have at least one child co-residing in the household. This study also indicates that married children who live on the family compound tend to provide food and/ or clothes to their parents whereas they usually receive monetary support from the single children who live elsewhere. Additionally, according to the same data source, the findings of the study on ‘Facts and Attitudes Among Younger Generation Thais Towards Care and Support of the Elderly’ revealed that most of younger generation (aged 15-44) frequently provided care and support to their elderly parents and this was practiced continuously for more than 5 years. ...

“Type of support given to the elderly person was significantly correlated with the distance between place of residence of the older person and younger generation. Elderly people who lived further away would tend to receive support in terms of money while those who lived close to younger generation would receive food and/ or clothes (Siriboon, 1992) (from Background Country Paper: Thailand, p. 11)

3. Sources of support in old age

“a. Pension systemb. Other programs for the elderly.c. Workd. Bequethable assets avaialble and control over these assets by older men

and women.e. Children and support they give to old age parentsg. Availability and use of financial assets such as insurance, bank accounts,

shares, bonds, co-operatives, etc.

“The vast majority of older people own their own home (81%) though such assets as the house and land are often transferred to children before death. Just under half (49%) of those surveyed said that they prepared for old age by saving. Other assets affect only a small proportion of the Thai population” (from Background Country Paper: Thailand, p. 12).

Support from children in old age

“The strongly held cultural norm in Thailand is that old people receive support from and live with their children. Both anthropological and survey evidence

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indicates that the stem family, where adult children live with their parents, is the cultural norm and is very common. Especially in the North and Northeastern regions the norm is for the daughter’s husband to move into the home at marriage. Though they may move out upon birth of one of more children, one child (usually the youngest) remains with the parents until their death. This system is flexible depending on the sex of surviving children and other circumstances. This kinship system has been called the matrilocal extended family.

“Several studies have measured the extent of this support. Household headship declines with age, at age 60-64 for men and age 55-59 for women, but 58% of of men age 85 and older are still listed as household head. A WHO study found that reliance on children increased with age; 43% relied mainly on children at age 60-64, 63% at age 70-74, and 82% at age 80 and up.

The ASEAN survey collected a great deal of information about living arrangements and income sources of the elderly. Over half (57%) of those 60 and older live with their children and this increases with age. Only 4% live alone and women are more likely to live alone than men. Of those who do not live with their children, 57% see them every day: 61% in rural areas and 36% in urban. Care or support from children is universal: 97% report receiving care or support from at least one child. It was found that old people have only a limited role in contributing to household chores. The largest proportion of older people (48%) report their children is their main source of income; 28% are still working, 8% rely on savings, and 7% report they have no source of monetary income.

Effect on old age support by children of important factors such as migration, education.

“As mentioned above there is a recognition that children now mainly contribute monetary income rather than labor to their parents. This is especially the case for those whose children have migrated and send remittances. Respondents were generally positive about this change.”

“... Additionally, migration rates among the younger generation to urban centers are increasing. This means that the numbers of old people who are left behind in the rural areas are increasing which may place strain on declining traditional support systems” (from “Patterns of Support Among Children to Old Parents”).

“Support or assistance from children is very important for the elderly parents because pension systems affect only a small proportion of Thai population; 70 per cent of the population is in the agricultural sector. Only 7 per cent of the labor force are government workers, who are covered by a pension system. Special health services for elderly people (aged 60 and over) were only started in 1992. Although homes are operated for needy persons (aged 65+ for men and 60+ for women) who are either homeless, and who have no relatives to live with or are

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unable to live happily with their relatives, they only house a very small proportion of elderly people.

“.. There is a general recognition that children’s repayment to their parents are becoming financial, as is common in other sectors of the economy, i.e., that children would be likely to contribute money rather than labor or services to their households (Pramualratana, 1990). This may be due to increased landlessness, the migration to urban areas by younger family members in search of jobs and increased employment for women, especially in the modern sector (Yoddumnern, 1992) (from “Patterns of Support Among Children to Old Parents”).

Support from “cohorts”McPherson (1993) studied the “demand” for support by elderly women, and potential “supply” of assistance from middle-aged women (their sisters, daughters). This area is worth studying in more detail, but while promising, it might not quite influence the demand for children as much as the specific demand for support from children.

4. Changing patterns of support for the elderly

“Buddhism, which has flourished in Thailand since the thirteenth century, has borne a strong influence in Thai society. Buddhism, as interpreted in terms of cultural expressions, has long been associated with the Thai way of life, attitudes, and codes of behavior of individuals at both societal and family levels. Moreover, in the past Buddhism played a very significant role in a person’s life from childhood to old age. However, during the past 2-3 decades Thailand has undergone rapid socioeconomic change toward more modernization and a greater degree of urbanization, and certain social values and behaviors which used to be closely related to religious interpretation are observed to undergo some changes as well in both the family and society in general. This may be an indication of a widening gap between beliefs and realities in modern Thailand” (from abstract of Limanonda, 1995).63

Knodel, et al, (1992a) studied the impact of fertility decline on familial support for the elderly and found that the impact of fertility decline per se will be relatively moderate with respect to coresidence, the most crucial aspect of familial support, despite an impending radical shift from the present situation, in which most Thai elderly have at least five children, to one where the large majority will have only two or three. Notwithstanding the very substantial fertility decline, few elderly are likely to be childless or to have only one child, and elderly parents with at least two children are still quite likely to live with one

63 Knodel, and Debavalya (1992), and Andrews, and Hennink (1992) have studied the issue of old age support in various cross-national studies. It is found that the majority of elderly in these countries live in households with their children and in many cases also with their grandchildren. The elderly also contribute significantly to household activities. In the future, the special needs of very old women will have to be addressed.

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of them. An important implication of the study is that, in settings similar to Thailand, the negative effect of lower fertility on familial support for the elderly need not be an overriding concern when deciding whether or not to implement policies to reduce fertility. This finding was re-iterated in Knodel, et al (1992b). The believe, however, that continued monitoring will be necessary to determine the nature and extent to which changes in living arrangements and other forms of familial support occur as well as their implications.

4.2 Costa Rica

A similar study of Costa Rica will be carried out in due course to understand the background and setting of the nation.

4.3 The Old Age Security Survey and its Preliminary Results

We now discuss the salient features of the Old Age Security Survey (OASS, 1991-92) as carried out in Thailand, and some of its preliminary results. A similar study will be carried out for Costa Rica (Section 7.2).

4.3.1 Thailand: The Survey and the Data

Geographical Area surveyed

Though initially, the idea was to work in the Northern and Northeastern regions,64

finally the survey was carried out in Central and Northeast Thailand (Nugent, 1990: 62). Southern Thailand was excluded to avoid complicating the study with problems of heterogeneity of the preferences arising from differences in race, religion, an cultures. A dual random sampling procedure was followed in selecting the villages and the households within this geographical area.65

In each of the two regions, two provinces were selected randomly. Then districts were randomly selected within each province, tambols (sub-districts) within each district and villages within each tambol.

Region - Province - District - Tambol (sub-district) - Village.

Within these sample villages, households were listed to determine their eligibility for the survey, and finally, sample households were selected randomly from this list. The criteria for eligibility are discussed in Nugent (1990).

Eligibility of households in the villages

Households with members falling within two age groups were considered for the survey:

64 Nugent, 1990.65 Nugent, 1990: 62.

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(a) Married women ages 28 to 39 and their husbands (of whatever age), and (b) older men and women aged 60 to 74.

The details of these groups are described below.

(a) Currently married women aged 28-39 with at least one living child were selected, with a leeway of plus or minus two years of reported age.66 This age range was chosen to assure that respondents were still in their childbearing years, and thus making decisions regarding future childbearing. One objective of the study was to inquire whether these decisions are related to old age security. A younger age range would not be desirable because they may not yet have considered old age security as a motive for having more or less children. Women with at least one living child were selected because this guaranteed that the women interviewed were fecund. Husbands of the women respondents were chosen to compare response differences between themselves and their wives. We attempted to reach as many husbands of the women respondents as possible. A total number of 1776 women and 1321 husbands were interviewed.

(b) The respondents in the older age group were men and women 60-74 years of age, ever-married and with at least one living child. The upper limit was placed on the age range to ensure the ability to converse coherently during the interview. The objectives for this interview were to inquire about actual support received by the old for comparative purposes to the younger respondents. Thus the older group of respondents provided information on the actual situation regarding support whereas the younger group reported future expectations and perceptions regarding their situation when they reach old age. The total sample of older people interviewed was 643 cases of which 322 were male and 321 were female.

Listing of eligible households/ respondents

“The household registration system at the district level does not provide up-to-date information. Births, deaths and changes of residence, for example, may not have been reported to the district office for a number of years. In addition, the relationship between various household members in the registration is often not clear. In some households there may be three or more individual families residing together, making it impossible to identify which members belonged to which families. We felt that this data source provided numerous complications affecting its reliability. Using the household registration during actual fieldwork would also cause problems as a selected respondent may not have actually been residing in that particular household for a number of years.

“Thus it was decided to use information from the sub-district health center, for several reasons. Information contained on the forms is up-to-date, being compiled within the year previous to the fieldwork. Secondly, it is a de-facto counting schedule. Thirdly, it is a national form available at all sub-district health centers. Finally, the health center 66 Reported age in Thailand is fairly accurate, as discussed in Knodel and Chayovan (1991).

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personnel were in most cases directly involved in this data collection and thus were able to clarify certain problems we had during the listing process.

“From the randomly selected villages all potentially eligible respondents were listed. These respondents included eligible wives in the first form and their husbands in the second; eligible older males and eligible older females in the third and fourth forms. From these forms of all eligible respondents we randomly selected 11 persons to be actual respondents for the survey fieldwork. This above procedure was undertaken at all the 32 Sub-district health centers of eight districts in all selected provinces” (from “The old age security motive and fertility: first results from the Thai survey,” p. 9).

Data Set and Data Description

An outline of the files contained in the data set is provided in Appendix I.

4.3.2 Preliminary Evidence

“The evidence from the first results of the study on ‘Parental Expectation and Experience of Support from Children in Old Age and Its Relationship with Fertility’ support the findings which were mentioned previously. It clearly indicated that sons and daughters were listed most frequently and ranked as the most important sources of support. Moreover, a majority of respondents (more than 85 per cent) received financial help from children. Assistance when ill, companionship and help in housework are also practical help received by the old. Daughters provided most of the care. This information showsthat the elderly parents expect and receive support from their direct offspring very much more than from other sources (Archavanitkul et al., 1993). (from “Patterns of Support Among Children to Old Parents”). Monetary support (from Patterns of Support …)

p.21: “Table 5 indicates that the average amount of money provided per year by the children of the old, according to the sex, age, marital status, number of living children, occupation and place of residence of children. The results seem to differ after the place of residence and occupation of children are taken into consideration. In general, the average amount was highest (3,223 baht per year) for children who stayed outside their parental village or for those involved in non-farm work (3,884 baht). The average was lowest (1,094 baht) for children who stayed in another house in village. Sons who co-resided in the parental households or stayed in another house in the village still seemed to contribute slightly more money than daughters. However, the opposite was true for children who stayed further away or who were involved in non-farm work.

“Additionally, for children who stayed outside the village, the average amount of money provided decreased with age of children. However, for the children who co-resided in their parents’ households or for those who stayed in the village, monetary

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support was highest from those aged 30-39 years an this pattern was also found among children who worked in the non-farm sector.

“Children who had ever been married seemed to provide more money to their parents than did single children among those who stayed in parents’ households or in another house in the village. However, for children who stayed further away, single children gave much more money in comparison to the ever-married children. The pattern of monetary support did not differ among married children and the single children who worked in farming or non-farming sectors. The single children still gave more money to their elderly parents.

“In addition, it can be seen that monetary support to the elderly decreases with the number of living children (grandchildren of the elderly people) among those children who stayed with their parents or those who stayed in the village. The average money provided to the parents was highest for those who had two or three children and who stayed further away. This also occurred among those children who were involved in the non-farming sector. However, the children’s current place of residence did not affect patterns of monetary support for the children who worked in the farming or non-farming sectors.

Support in kind

“Table 6 displays approximate costs of support in kind given annually by children to their elderly parents, according to sex, age, marital status, number of living children, residence and occupation. In general, the provision of support in kind was highest (932 baht per year) by the children who stayed further away or among those children who worked in the non-farming sector. Daughters tend to provide more food and/ or clothes than sons irrespective of their occupation and place of residence.

“Provision of support in kind increased with age of children for those who lived with their parents, stayed in the village or were involved in farming. For children who stayed outside the village, the provision of food and/ or clothes seemed to peak at around the ages of 30-39 years. This pattern was also found among those who worked in the non-farming sector.

“Single children who stayed in the village or stayed further away were likely to provide food and/ or clothes to their parents, in comparison to ever-married children. However, the reverse holds true for children who lived in parental households. There were practically no differences in terms of patterns of support in kind between married and single children according to occupations. Married children provided more food and/ or clothes than single children, both among the children who worked in farming or in the non-farm sectors.

p.23: “.. the value of support in kind to the aged ... increased regularly with the number of living grandchildren, across all forms of occupation.”

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Provision of physical care

“Variations in provision of physical care, which is defined as a form of personal support to parents in this study, were also related to the differences in backgrounds of children (Table 7). In general, as might be expected, the percentage of children who provided physical care to parents was highest among those who lived with their parents and decreased with increasing distance between parents and children. 92% of children who worked on farming did provided physical care, the percentage was lower for children who worked in the non-farming sector. .... (from “Parental Expectation and Experience of Support from Children in Old Age and Its relationship with Fertility”)

Summary of findings from the younger sample

p.14: “Our findings reconfirm the strong cultural norm of dependence on children in old age. Sons and daughters were the most frequently named sources of support and were consistently ranked the highest in importance. We did find regional differences in expectations of children, as those in the Northeast were more likely to expect help with work, housework and financial help than those in the Central region. Most intended to live with their children in old age, with a continued preference in the Northeast for living with a daughter

“We found some evidence of a relationship between expected fertility size and expected support in old age. Though there was little difference in expected family size between those who listed children as first ranked source of support and those who did not, those who expected financial help from children tended to have larger expected family size than those only expecting companionship and/ or care when ill.

“Though expectations of support from children in old age were high, we also found evidence that children were seen as a financial burden. Given the hypothetical situation of having one more child, most expected their financial status to be worsened, and many said their financial situation would improve if they had one less child. This finding supports the notion that the quality of children was more important to our respondents than the quantity; in other words, that only a small number of children (two or three) is sufficient to assure old age security. Together these findings indicate a relationship between the perceived value of children and family size, whether this value is economic or non-economic; though the major finding is the pervasiveness of the expectation of support.

Summary of findings on older people

p.23: “Our findings confirm the strong reliance on children for care and financial support. When asked about different types of support, the oldest respondents ranked sons and daughters highest in both regions. With regard to direct care, both on a regular basis and during times of illness, daughters clearly were more likely to provide care and emotional support than sons, in both regions, and this was especially true for the older women. It appears that this is partly because men are able to rely on their spouses for

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care. A small but significant proportion of respondents however (about 15%) did not rank their children as the first source of support. Most of those in this group stated that this was because children did not earn enough for themselves. We would conclude that aging parents did not see their adult children as irresponsible, but that they understood the economic constraints placed upon their children.

“We found clear regional differences in the perceived benefit of having an additional son or daughter. Northeastern residents were more likely to feel an additional child would benefit them, and particularly for the male respondents, were more likely to see the benefit of an additional son. In contrast Central residents were more likely to say an additional child would have no effect on their situation, though women were more likely to see the benefit of an additional daughter. These regional differences are particularly vivid in light of the high percentage of respondents who said their financial situation was inadequate, particularly in the Northeast. Financial hardship was also found to be related to number of living children, though the relationship was opposite in the two regions: Northeastern residents with more children were slightly less likely to say their finances were inadequate, while Central residents were more likely to have financial hardship if they had many children. Though most respondents in both regions stated that they received an adequate level of care and assistance, a not insignificant proportion also stated that they did not, particularly in the Northeast; and the figures on inadequacy of care increased with family size in both regions.

“A majority also reported adequacy in companionship in both regions, but again the proportion with inadequate companionship was higher in the Northeast; and it is interesting that this was related to family size ...”

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Chapter 5Testing of the Models

This chapter will be formulated in due course, and will constitute the bulk of the work leading to the dissertation.

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Chapter 6Conclusion

At this stage, one has begun to realize that “As yet ... there is little understanding of how social, economic, political and cultural structures and institutions interact to produce the motivation for reducing fertility” (Sadik, 1991:11).

The dissertation arising from this proposal may not dramatically enhance our understanding of this area. However, it is hoped, that this work will improve our understanding of economic basis of fertility, and in particular help us in understanding the role of the old age security motive, and possibly throw some light on the comparative efficiency of traditional institutions versus formal institutions.

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Appendix IData Description

The data set is currently available in the form of the following files. I have not yet prepared the data for the analysis, but that should not be too difficult, since data stored in .por files is in SPSS portable format, and can be viewed in SPSS for Windows.

ACOA LOG 2,400 01-23-97 12:22p acoa.logACOA SAS 102,482 01-23-97 12:22p acoa.sas

CHILD1 POR 219,678 01-23-97 12:23p child1.porCHILD1 SYS 249,510 01-23-97 12:23p child1.sys

CHILD2 POR 249,116 01-23-97 12:24p child2.porCHILD2 SYS 28,672 01-23-97 12:24p child2.sys

EDS 2 01-23-97 12:24p edsGREENSYS SYS 981,874 01-23-97 12:31p greensys.sys

HHOLDER POR 157,030 01-23-97 12:31p hholder.porHHOLDER SYS 123,342 01-23-97 12:32p hholder.sys

HHTABLE POR 332,592 01-23-97 12:32p hhtable.porHHTABLE SYS 433,959 01-23-97 12:33p hhtable.sys

HTH014 LOG 26,380 01-23-97 12:33p hth014.logHTH014 LST 52,160 01-23-97 12:33p hth014.lstHTH014 SAS 18,629 01-23-97 12:34p hth014.sas

HUSBAND POR 455,510 01-23-97 12:34p husband.porHUSBAND SYS 277,673 01-23-97 12:35p husband.sys

JERRY1 PRO 103 01-23-97 12:35p jerry1.pro

NCHILD POR 219,678 01-23-97 12:35p nchild.porNCHILD2 POR 249,116 01-23-97 12:36p nchild2.por

OLDER1 POR 168,018 01-23-97 12:36p older1.porOLDER1 SYS 115,364 01-23-97 12:36p older1.sys

OLDER2 POR 171,052 01-23-97 12:37p older2.porOLDER2 SYS 110,114 01-23-97 12:37p older2.sys

OLDER3 POR 237,226 01-23-97 12:37p older3.porOLDER3 SYS 142,799 01-23-97 12:38p older3.sysOLDER4 POR 146,370 01-23-97 12:38p older4.por

OLDER4 SYS 98,269 01-23-97 12:38p older4.sys

SPSS JNL 0 01-23-97 12:38p spss.jnl

TEST LOG 2,503 01-23-97 12:38p test.logTEST SAS 1,432 01-23-97 12:38p test.sas

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THAI LOG 9,968 01-23-97 12:38p thai.logTHAI LST 134,939 01-23-97 12:39p thai.lstTHAI SAS 1,414 01-23-97 12:39p thai.sas

TTT 53,727 01-23-97 12:39p tttTTT LOG 76,428 01-23-97 12:39p ttt.logTTT LST 192,145 01-23-97 12:39p ttt.lst

WIFE1 POR 499,380 01-23-97 12:40p wife1.porWIFE1 SSD 1,908,737 01-23-97 12:46p wife1.ssdWIFE1 SYS 320,004 01-23-97 12:46p wife1.sys

WIFE109 LOG 65,618 01-23-97 12:47p wife109.log

WIFE1091 LOG 69,254 01-23-97 12:47p wife1091.logWIFE1091 LST 272,079 01-23-97 12:48p wife1091.lstWIFE1091 SAS 55,442 01-23-97 12:48p wife1091.sas

WIFE1092 LOG 67,727 01-23-97 12:48p wife1092.logWIFE1092 LST 63,833 01-23-97 12:48p wife1092.lstWIFE1092 SAS 47,191 01-23-97 12:48p wife1092.sas

WIFE1093 LOG 81,077 01-23-97 12:48p wife1093.logWIFE1093 LST 220,211 01-23-97 12:49p wife1093.lstWIFE1093 SAS 49,528 01-23-97 12:49p wife1093.sas

WIFE2 POR 612,950 01-23-97 12:50p wife2.porWIFE2 SYS 367,765 01-23-97 12:51p wife2.sys

WIFE3 POR 578,100 01-23-97 12:52p wife3.porWIFE3 SYS 376,165 01-23-97 12:53p wife3.sys

WIFEHH DAT 49,430 01-23-97 12:53p wifehh.datWIFEHH POR 429,598 01-23-97 12:53p wifehh.porWIFEHH SYS 275,398 01-23-97 12:54p wifehh.sys

WTH014 LOG 113,631 01-23-97 12:54p wth014.logWTH014 LST 192,145 01-23-97 12:55p wth014.lstWTH014 SAS 53,752 01-23-97 12:55p wth014.sas

XXX 19,438 01-23-97 12:55p xxx

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