Since time immemorial, parents have struggled with the question of the optimum number of children they should have. Well, everything is driven by incentives: we offer an economic perspective on happiness, nature, and nurturing as we analyse the marginal cost of a child against its benefit.
The birth of a child is considered a moment of unbound joy and is believed to provide families with a wholesome experience. What follows next is a series of sleepless nights, great anxiety, and several potty training sessions. Raising a child in today’s world is no piece of cake, be it in terms of personal devotion, child-care responsibilities or financial needs. Families, rich and poor alike, face their own set of challenges with respect to the same. Putting this into perspective, these issues arising from varied aspects add up to one big question: what is in it for the parents? Let alone going through the process more than once, is it all truly worth it?
Raising this question, we believe children born in different set-ups, in terms of beliefs and economic backing, add varied sorts of value to the particular household. A family belonging to the lower-income group generally believes that having a larger number of children means more hands to work in the field or otherwise, completely negating the cost of actually raising these children. For those poor, rural families, children are not only seen as an economic asset but also as an insurance policy for old age, especially in societies with zero state pension and health care. However, we observe that as the income of a family increases, the smaller the family is, i.e. they prefer to have fewer children. With rising incomes, families don’t need their children to be an economic asset; the family can afford for their children to be an economic liability. Furthermore, people with a superior economic standing believe in providing better education and lifestyle to their children. Hence, while, children in impoverished communities contribute to their family income, children in the developed world subtract from family finances through the cost of their education and upbringing.
This can also be measured by weighing the marginal cost against the marginal utility of procreating. The marginal cost and utility, incurred and reaped respectively, largely depend upon the budget constraint of each household. Hence, so does the optimum number of children. This brings us to the conclusion that there is a negative correlation between family income and family size which further leads to a trade-off between the quantity and the quality of children.
This brings us to the idea that having a higher number of children reduces the cost of raising each additional child; in short, highlighting diminishing marginal cost. The reason behind this is that most of the necessary child raising equipment- like high chairs, cribs, and clothes - can be passed onto the next child, and no additional money is required to be spent on the same. Moreover, with many family and parent-child health insurance plans, the monthly premium remains the same, irrespective of the number of children. This points to a lower cost per person. Additionally, there are several universities in the States that provide various benefits to families with more than one child. Therefore, it could so happen that due to these benefits the cost per unit of putting ten children through college could be less than that of putting one. Who says houses cannot be run on economies of scale?
Irrespective of the economies of scale, there are substantial costs that remain fixed: a large number of children leads to the dilution of parental resources- financial as well as time. These fixed costs include expenses on food, healthcare, and basic clothes for lower-income groups. Similarly, the fixed costs of higher-income groups are much larger as they involve education, and extra-curricular activities amongst others. Moreover, these children also give their parents a fair share of headaches. Being anxious about everything pertaining to their children forms a crucial part of a parent’s identity. This leads us to another opportunity cost which is the personal freedom of these caregivers. This causes the parents to juggle between giving time to their children and finding time for themselves and their work. Therefore, as the number of children increases, there is a marked drop in the time spent with each child. Many of them might grow up feeling neglected.
Like identified in the foregoing paragraphs, the utility and benefits that the parents reap from their children can be seen in the form of economic and old-age support. However, it is also important to realise that as the number of children that a couple has increases, there is a decline in the marginal utility. This is because, with each additional child, there is a decreasing extra satisfaction that the couple will gain. This can be seen in the way that if a couple has 5 children then they will receive more satisfaction with their firstborn than they did from their last born (5th child in this case). Hence, as the number of children a couple has increases, the law of diminishing returns starts to hold true.
To conclude, what is truly in it for the parents purely depends upon the type of income groups that they belong to. Thus, regardless of whether couples want children for personal attachment or joy, it all eventually boils down to the economic cost and utility of having one!
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