The per-capita-income criterion and natality policies in poor Countries

Discussions of birth rates in less developed countries (LDC’s) are almost always couched in terms of income per-capita or per-consumer-equivalent. A decrease in population growth rate is said to lead to a higher per-capita income (PCI) than would occur with a higher birth rate, and therefore a lower birth rate is advocated. This runs the danger of choosing a course of action that people really do not want. A static analysis of a PCI criterion leads to an optimum which is quite unacceptable. One can raise the PCI of any given group by getting rid of all small sub-groups that have a lower PCI. Static analysis is not directly relevant to those problems of LDC’s, because the relevant control variable is the birth rate. This paper explores some of the ramifications of different birth rates. The general conclusion is that per-capita income alone cannot be a satisfactory criterion for a rational national natality policy. At best it can be but one factor to be taken into consideration in such a policy decision.