The notion that the cost of increasing family size depends upon the level of expenditures or investment per child (child quality), formalized in Becker and Lewis (1973) and Willis (1973), provides a rationale for the contemporaneous inter-country negative correlation between the schooling attainment of young persons and birth rates as well as the trends in these variables over time in developed countries during their demographic transition.A sufficient condition for fertility to fall and, say, schooling to rise as development proceeds in this framework is that the shadow-price constant income effect on quality per child 1 exceed that on numbers of children.Such an explanation, however, would appear :..o be of little value for those who hold that population growth itself impedes economic development (e.g., Coale and Hoover (1958)).From this perspective, the compensated substitution.implications of the theory are of concern, whereby price interventions which impinge on family size decisions can be used to accelerate pe~-capita income.The chief focus of policies aimed at reducing fertility in the absence of income growth appears to be on altering the "own" price of children through lowering information costs associated with contraceptive methdos in order to take advantage of recent innovations in birth control technolo~y.In this paper, we examine both theoretically and empirically the natalist impact of two alternative potential policies--reductions in the price of schooling and tech~ological innovation in the agricltural context--based on a rural household model in which (school) investments per child influence the cost of children as in the Becker-Lewis framework and in which the returns to schooling rise in a dynamic environment as a consequence of the allocative effect of education (Welch, 1970;Schultz, 1975).I show that, as a consequence of the "quantity-quality" interaction, reductions in the direct costs of schooling may raise fertility levels even if child schooling and the quantity of children are substitutes as conventionally defined and even if (observed) income effects are not positive.2,:. w

Few attempts have been made to test empirically the multitude of models formulated to describe household labor supply behavior in the context of rural labor markets in developing countries. In this paper refutable predictions are derived from a neoclassical multi-person household model based on competitive assumptions modified to take into account differences in landholding status. A national sample survey of rural households from India is used to estimate the parameters of the model for male and female agricultural workers from farm and nonfarm households. The estimates generally conform to the implications of the neoclassical-competitive framework.

Mark R. Rosenzweig, Kenneth I. Wolpin, Specific Experience, Household Structure, and Intergenerational Transfers: Farm Family Land and Labor Arrangements in Developing Countries, The Quarterly Journal of Economics, Vol. 100, Supplement (1985), pp. 961-987