“Imagine each family as a kind of little factory – a multi-person unit producing meals, health, skills, children and self-esteem from market goods and the time, skills and knowledge of its members.”
Sentences like this give economists a bad rep. Gary Becker, who pioneered the use of economic thinking to understand how we make the most personal of our decisions – such as choosing a spouse or having children – modelled the family as an economic unit. But in reducing humans to simple widget producing automatons who base their decisions on cost-benefit analyses, economists can be criticised for taking their theories too far. Nonetheless, the cool-headed analysis is useful in explaining complex events.
One such phenomenon is the demographic division between urban and rural India. Early last month most of the attention was focused on the Budget’s economic impact. Hidden under weighty discussions of universal basic income, growth projections and development indicators, the Economic Survey, released a day before the Budget, contained fascinating nuggets that offered a glimpse into a changing country.
The survey mentioned in passing that for its level of income, the pace of India’s urbanisation is low. At first blush, this seems counterintuitive. Witnessing the chaotic traffic and frantic construction in most cities, one would think that urban India is growing at a faster pace than its villages. But over the past few decades, the growth rates of urban and rural India have diverged significantly. Fertility rates (calculated as the number of births per woman) in cities have fallen faster than the rates in villages – and this effect has outstripped urban migration. Families in cities are becoming smaller.
Research by Alaka M. Basu and Sonalde Desai at the National Council of Applied Economic Research shows that a section of India’s population has already transitioned to extremely low fertility – the single child family. The share of one child families in India is low (5%), but they form almost 13% of the families in metro cities. This effect is more pronounced for elite Indians – couples with high levels of education or income are choosing to stop at one child. And it’s a growing trend.
This effect isn’t very surprising. As incomes rise, the time spent on childcare becomes more expensive. Most Western countries are now grappling with a problem of extremely low fertility rates, which is now an impediment to growth. But India, with its social norms and conservative values, is a bit different.
Basu and Desai’s research tries to suss out the reasons behind urban India’s one child families. Their data shows that couples that opt to have a single child aren’t consumed by work or a desire to have more disposable income. Rather, these parents are motivated by aspirations of social mobility. Simply put, parents want good, well-paying jobs for their children. This desire is reflected in increased investment in a child’s education – children from one-child families are more likely to attend English-medium private schools and attend after-school tuitions compared to peers from larger families.
Are single-child families really any different from other families? Dissecting family interactions isn’t easy, but that hasn’t stopped economists from trying. One of Becker’s more famous papers – ‘Interaction between the quality and quantity of children’ – begins with a matter-of-fact assertion that there is a negative correlation between the number of children in a family and the quality of the children as perceived by others.
Who wears the pants in the family?
A recent paper by economists at the University of Maryland and Indiana University goes further and argues that the rise of dual income households and a decline in family size has given children the power in families. The authors arrive at this conclusion by viewing the family as a competitive organisation. Every member in the family is competing for limited resources, whether affection or material goods. Parents want their children to be well behaved and do well in school. Children in return expect rewards from their parents.
As the size of the family reduces, there is less competition among siblings for resources from their parents. Rising incomes for women also lead to greater competition between parents as they vie for their children’s affection.
Shailesh Chitnis is a freelance journalist based in Bangalore. He writes on topics that are at the intersection of economics and society.