Educational Subsidy, Agricultural Development, and Fertility Change

Abstract

In this paper, the effects of continuing agricultural technical change on the allocation of resources by households between increments to family size and to schooling are examined within the context of a model of household decision-making in which education facilitates innovation. An empirical application of the model to data from India indicates, consistent with the theory, that in farm households more intensively exposed to the new technologies associated with the “green revolution,” fertility was significantly reduced, while the level of schooling investment was significantly increased. In contrast, and also consistent with the model, proximity of schools, in the absence of technical change, had only marginal effects on schooling and little impact on family size.