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Family Planning and Development: Aggregate Effects of Contraceptive Use

Author

Listed:
  • Tiago Cavalcanti

    (University of Cambridge)

  • Cezar Santos

    (Fundacao Getulio Vargas)

  • Georgi Kocharkov

    (Universidad Carlos III de Madrid)

Abstract

What is the role of family planning interventions on fertility, savings, human capital investment, and development? To examine this, endogenous unwanted fertility is embedded in an otherwise standard quantity-quality overlapping generations model of fertility and growth. The model features costly fertility control and families can (partially) insure against a fertility risk by using costly modern contraceptives. In the event of unexpected pregnancies, households can also opt to abort some pregnancies, at a cost. Given the number of children born, parents decide how much education to provide and how much to save out of their income. We fit the model to Kenyan data, implement several family planning policies and decompose their aggregate effects. Our results suggest that given a small budget (up to 0.5 percent of GDP), legalizing and subsidizing the price of abortion is a more cost-effective policy for improving long-run living standards and reducing inequality than policies that either subsidize the price of modern contraceptives or subsidize basic education.

Suggested Citation

  • Tiago Cavalcanti & Cezar Santos & Georgi Kocharkov, 2018. "Family Planning and Development: Aggregate Effects of Contraceptive Use," 2018 Meeting Papers 332, Society for Economic Dynamics.
    • Handle: RePEc:red:sed018:332
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    References listed on IDEAS

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    1. Levine, P.B. & Staiger, D. & Kane, T.J. & Zimmerman, D.J., 1999. "Roe v Wade and American fertility," American Journal of Public Health, American Public Health Association, vol. 89(2), pages 199-203.
    2. Kalemli-Ozcan, Sebnem, 2003. "A stochastic model of mortality, fertility, and human capital investment," Journal of Development Economics, Elsevier, vol. 70(1), pages 103-118, February.
    3. repec:ucp:bknber:9780226740867 is not listed on IDEAS
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    Cited by:

    1. Doepke, Matthias & Hannusch, Anne & Kindermann, Fabian & Tertilt, Michèle, 2022. "The Economics of Fertility: A New Era," IZA Discussion Papers 15224, Institute of Labor Economics (IZA).
    2. Yao Yao, 2022. "Fertility and HIV Risk in Africa," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 45, pages 109-133, July.
    3. Yin, Yongkun, 2023. "China’s demographic transition: A quantitative analysis," European Economic Review, Elsevier, vol. 160(C).
    4. Fernández-Villaverde, Jesús & Delventhal, Matthew J. & Guner, Nezih, 2021. "Demographic Transitions Across Time and Space," CEPR Discussion Papers 16708, C.E.P.R. Discussion Papers.
    5. de la Croix, David & Pommeret, Aude, 2021. "Childbearing postponement, its option value, and the biological clock," Journal of Economic Theory, Elsevier, vol. 193(C).
    6. Christian Alemán & Christopher Busch & Alexander Ludwig & Raül Santaeulàlia-Llopis, 2022. "A Stage-Based Identification of Policy Effects," Working Papers 1369, Barcelona School of Economics.
    7. Nuevo-Chiquero, Ana & Pino, Francisco J., 2019. "To Pill or Not to Pill? Access to Emergency Contraception and Contraceptive Behaviour," IZA Discussion Papers 12076, Institute of Labor Economics (IZA).
    8. Bhattacharya, Joydeep & Chakraborty, Shankha & Kim, Minkyong, 2023. "Child survival and contraception choice: Theory and evidence," Journal of Macroeconomics, Elsevier, vol. 77(C).
    9. John Kennes & John Knowles, 2024. "Unmarried Births: Accounting and Equilibrium Analysis"," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 52, pages 84-109, April.
    10. de Silva, Tiloka & Tenreyro, Silvana, 2017. "The large fall in global fertility: A quantitative model," LSE Research Online Documents on Economics 86157, London School of Economics and Political Science, LSE Library.
    11. Seshadri, Ananth & Zhou, Anson, 2022. "Intergenerational mobility begins before birth," Journal of Monetary Economics, Elsevier, vol. 129(C), pages 1-20.
    12. Reyer Gerlagh & Veronica Lupi & Marzio Galeotti, 2023. "Fertility and climate change," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(1), pages 208-252, January.
    13. Kaixing Huang, 2024. "Fertility and long‐term economic growth," Economic Inquiry, Western Economic Association International, vol. 62(3), pages 1152-1171, July.

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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