Kemp and Long demonstrated that it may be preferable to exploit high and low cost resource deposits simultaneously and not in sequence as is typically assumed in the resources literature. They show that it is desirable to delay extraction from low cost pools in order to smooth consumption over time, if the resource in the ground is society's only store of wealth. This paper considers a model in which extracted resources can be converted into capital which may either be consumed or stored to provide for consumption later on. We find that a sufficient condition for the strict sequencing of extraction to be optimal is that stored capital be productive so that it can be used to produce additional capital.

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