Poverty, Fertility and Child Labor: Does Demand Theory of Fertility Matter? An Exploratory Study in India

Abstract

It is hypothesized that fertility, poverty and child labor are jointly determined variables; neither can be assumed to be an independent determinant of the other. In a simultaneous equation framework, we find that demand theory of fertility does hold good even at the lower level of income where the females are compelled to go outside home for cash in order to avoid destitute and they prefer less number of children. Therefore, in order to regulate fertility in India, one can suggest increasing female employment opportunity at the informal sector, since formal sector job is severely restricted in India. It is observed that child labor is caused by lower health status and poor human capital investment. Thus, if we increase the per capita social sector expenditure on education and healthcare, it directly augments enrollment of the children in school. Since health and education is treated as complementary to each other, a rise in social sector investment has some spillover benefits to the society.