Ananish Chaudhuri: Does having kids increase your options?

In many Third World countries, children can be a source of income. Photo / AP

It is my experience that any discussion about strengthening the social safety net for the economically disadvantaged quickly meets resistance via two types of objections.

One of these holds that the less fortunate are by and large lazy and lackadaisical, and who would rather exploit the benefits of the social welfare system than earn an honest living. The second objection is usually posed as the following question: If they are so poor, why do they have so many kids?

In this column I intend to tackle the second question about the poor having many kids. Here the obvious conclusion that one must draw is that the poor are poor because they have so many kids who need to be fed and clothed; if only they did not procreate with such fecundity, then they could easily find a way out of poverty.

It turns out that this implied causality is utterly incorrect. It is not the case that they are poor because they have so many kids but rather that they have more children because they are poor.

There are different ways of thinking about this. Let me explain.

The evidence suggests that across the world citizens of richer countries tend to have fewer kids compared to those in poorer countries. So the birth rates in countries like Sweden or Switzerland are much lower than those in Bangladesh and sub-Saharan Africa.

But even within the same country birth rates (typically the number of live births per thousand persons) start to drop as income levels rise. This has happened in recent years in many developing countries such as India. Even within the same country this pattern is evident. The birth-rate in India's poorest state of Bihar is almost twice that in richer states like Kerala or Tamil Nadu.

There are many reasons behind this. Part of the answer comes from evolutionary biology. In poorer societies where many children die in infancy, people tend to have more children so as to ensure that at least some of those children live to adulthood. Furthermore, in countries with inadequate social security and retirement benefits, parents often rely on children to take care of them in old age.

In many Third World countries - which may not have child labour legislation - children can also be a source of income as they can be sent off to work in the field, in the local tea-shop or as domestic servants.

But as income levels rise, birth rates fall. With rising incomes, there are more opportunities, including for women. Now the cost of having a baby needs to be considered against the consequent loss of income from her wages, a trade-off that was not required when jobs for women were few and far between.

Clearly then, the way to get women to have fewer babies is to increase their options and income; with increasing income and education birth rates fall.

But what does this have to do with the poor in a rich country like New Zealand? Clearly compared to the poor in Bangladesh, the poor here are far better off. So how come they have more kids?

It is worth pointing out that this finding is also widespread. Even in rich countries, the socio-economically disadvantaged tend to have more children.

How many more? According to data provided by Statistics New Zealand our average fertility rate (roughly the average number of babies per mother) is 1.96. For Asians and Europeans the rates are 1.67 and 1.77 respectively. For Maori it is 2.59 and for Pacific Islanders it is 2.94. So yes, on average, the Maori and Pacific Islanders do tend to have more children than Asians or Pakeha.

There is certainly a difference, but not a large one, as some tend to think.

Where does this difference come from? There is an approximate childbearing age, roughly between 15 and 49. How are some mothers managing to have more kids?

The answer is that some - particularly those who are economically worse off - are having kids at a much earlier age. For instance, looking only at 15 through 19-year-olds the fertility rates among Maori and Pacific Islanders are two to four times higher than the national average.

But in understanding what is driving early pregnancies among some groups, one needs to think a little more deeply about the choices facing young people.

Having a baby is a choice and like most choices it involves trade-offs. For women from more privileged backgrounds, child-bearing at an earlier age is very costly in terms of the sacrifices this involves, in terms of their education, their careers and their foregone income.

But research undertaken among young and welfare-dependent mothers in low income neighbourhoods of Philadelphia suggests that they perceive no strong impetus to postpone child-birth since they have limited other options and no sterling careers to look forward to. The same seems to be true among the economically disadvantaged in most rich countries.

Why does this perception persist? Surely in countries like New Zealand there are plenty of opportunities for young people of all backgrounds.

It is entirely possible that this view of having limited options is mistaken but the perception, if it exists, may be enough to guide child-bearing choices; or may be the perception is closer to reality and the hurdles that need to be overcome on the path to rewarding careers are indeed much more formidable.

Current evidence suggests that children born in poverty continue to suffer disadvantageous after-effects in a wide variety of ways. Many - if not most - of these are not in their control.

The bottom-line is inescapable: Deprivation leads women to have more kids; kids are not the primary cause of that deprivation.

Ananish Chaudhuri is Professor of Experimental Economics and Head of the Department of Economics at the University of Auckland Business School. The views expressed are his own.

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