Abstract:
The study using a two-period overlapping generations model analyzes the complementing
nexus between child nutrition and child education and how it alters parent s fertility
decisions. The results of the model show that in the intermediate phase, the economy
experiences a demographic transition. In this interval the child quantity-quality trade-o¤
is observed but at a later stage the continuing process of increasing human capital allows
agents to generate adequate resources to rear more children and simultaneously endowing
them with the capacity of providing the children with education and nutrition. Minimum
level of fertility in the model is attained when maximum child nutrition and time devoted
towards education are attained. When human capital exceeds the maximum threshold
level time devoted to education becomes a constant i.e. further increases in human capital
has no e¤ect on the time devoted to education pertaining that maximum capacity to learn
has been reached. The analysis yields three steady-state level of equilibrium. Parents
having low human capital prefer child quantity over child quality and hence are trapped
in the low steady-state where both child labor as well as an undernourished population
is dominant. The medium steady-state is considered to be desireable for the economy
in our model since it is characterized by high human capital, low fertility and high child
nutrition. Moreover, the model also provides an insight on child labor and its implications
for the economy.
