Comments

A timely and highly relevant topic Richard. Thank you again for bringing it to the fore. Australia needs to move openly and quickly to adopt its own pathway forward. The present system is inadequate given our size, unbalanced, reactive and unfair.

Thanks Terence! Glad you found the post interesting. And to be clear, while I am an economist and therefore know some of the theory, part of the reason for me writing the post was because I find the debate somewhat perplexing myself and wanted to hear from others. So I approach it humbly - at least as humbly as possible for an economist! Theoretically, when considering whether a good is normal or inferior, it’s only the change in budget line, or income, that we are concerned with - prices, costs, benefits, etc, remain constant. So if a good is truly normal (inferior), an increase in income, with everything else constant, would result in more (less) demand for that good. The point of my post is to argue that just because an increase in income is associated with a decrease in childrearing (Figure One), we cannot assume that prices, costs, utility, etc, remain constant throughout the development process. So actually, *in theory* children are normal while in reality they appear to not be normal because assuming everything else constant is a flawed assumption. But, if we could fairly assume the constancy of these other variables we would expect to see an increase in fertility. I think I grant your point about other factors being more important for such historical change since we don’t see fertility skyrocketing in rich countries. Maybe the best way to approach it is not to equate development - where the constancy of other variables cannot be safely assumed - with exogenous income increases - where they can be safely assumed. Obviously, the vast changes experienced by a country going from poor to rich, as shown in the fertility data in countries that have done so, is vastly different than a country or region experiencing an exogenous one-off income shock, as shown with a coal boom in Appalachia USA in Black et al (2013) where fertility did increase. In the first case, there is obviously a lot more happening and while children may still be theoretically normal, we can expect to see a negative income-fertility relationship because there is just so much changing. But when we look at a mining boom in Appalachia or perhaps an iron ore boom in WA, we would expect to see an increase in fertility. Still, economists seem to have mixed views about all this which is why I have been exploring it. Finally, I want to argue why I think the question of whether children are normal or inferior may be less intellectual pontificating and actually important (a partial response to Ashlee’s last post). Many macroeconomic models focus on k=K/N, the capital per worker in an economy as the engine of economic growth. As an economy develops - or, as K and N both increase - they will be competing with each other to determine the way k changes over time. If fertility is increasing at a low (high) rate, k grows faster (slower). I think most people would agree that fertility is an important indicator in an economy yet we still don’t seem to fully understand how it changes with changes in income. Of course, this sort of modeling is usually done on aggregate so the individual cases Ashlee mentioned in her previous posts are too often replaced in favor of a more simplistic “representative agent” model. I cannot defend every flaw of economic theory and I do not deny the importance of these other factors. Obviously this is imperfect and I’ve actually been trying to crack this with some sort of heterogenous agent model that considers two or three cases, but it’s really hard - maybe even impossible. Let me know if that clarifies the post a bit. If not, I’ll do my best to try again.

Hi Matthew, That's a really interesting post thanks. Sorry, I'm not an economist and so find the theory you put forwards a little confusing, but aren't you arguing that *in theory* kids are inferior goods? Setting that aside, it seems to me the nub of the debate you link to is whether there's a positive relationship between income and children *once you take many other factors into account* (Caplan) or whether this is largely irrelevant because its those many other factors that have driven the massive changes we are currently witnessing globally (Woolfers). You provide good evidence for a positive relationship once other factors are taken into account with the papers you link to. But it's worth emphasising -- particularly for people working in development policy -- that this doesn't mean other factors don't matter, or even that other factors aren't more important in driving the big historical changes. Indeed, the real ramification of kids being normal, once everything else is taken into account, is that other factors must matter much more, otherwise we would have seen fertility skyrocket as countries became more wealthy. As an aside, it's hard to look at Figure 1 and conclude that the drivers of fertility mightn't be very different in wealthy countries from those in developing countries. And, also that this might be more of a step change rather than something that exists along a continuum. Thanks for an interesting post. Terence

Nice article, Richard. The RSE Relationship Managers do a great job on the interface between the Pacifica Labour and Skills Team that George Rarere manages, the Regional Labour Governance Groups that monitor labour demands for labour in the different regions, the Labour Inspectorate that monitors compliance with workplace regulations and conditions of employment, the employers and the lead producer agencies like Apples and Pears New Zealand (formerly Pipfruit New Zealand), Horticulture New Zealand, New Zealand Winegrowers and New Zealand Kiwifruit Growers Inc. They are a vital cog in the system of relationships that sustain the dynamic RSE system that is currently under review as part of a wide-ranging reassessment of immigration policy in New Zealand, including New Zealand's relations with Pacific countries (the "Pacific Reset" that the Minister of Foreign Affairs and Trade, Winston Peters announced early in 2018). The RSE Relationship Managers are one clear signal that Immigration New Zealand is not treating the RSE work policy as "business as usual" despite the fact that the policy is into its 12th year of operation. Maintaining a wider systems approach to the dynamic set of relationships that underpin a managed seasonal migration programme is essential if these programmes are to contribute to sustainable forms of economic and social development in both the labour sending and labour receiving countries.

It is very sad to look around and see the gaping gap, right there in our face and we can do nothing but work and give more money to the capitalist and exclusive system that we have in the world. Inequality is all over the world, we suffer too much. Some have many and many have nothing.

Hi Derek, thanks for your comment. While I don't have a good first-hand understanding of urban settlements in PNG I don't doubt for one minute what you say. I'd really recommend dipping into the work of Craig and Porter that I reference in the blog. Melissa Demian at St Andrews has also recently engaged with settlements in Lae. You are spot on about a lack of statistics and analysis. Part of the problem in Solomons, and, as I understand it, PNG, is that there is no geo-specific police data. It makes it hard to measure longitudinal crime trends in these places. Unfortunately, there are (to-date) few signs of the coordination you mention in Honiara.

Thanks for your reply Matthew. I certainly see the utility of economic analysis on family size choice etc and other factors, but as a non-economist I just get frustrated by what are counted as 'costs' — the bodily toll on women etc often being ignored, and their unpaid domestic labour and reproductive labour. I also question why there is a need to categorise a child as a normal/inferior good for analysis purposes when it very much dependent on context and circumstance! From a purely economic standpoint, as a single woman in my mid 30s in a developed country, a child for me would be a normal good, because I would have to go through very expensive IVF so there would be an outlay of capital, and also to afford to pay childcare to continue to earn an income (high recurrent costs). (Yes, I could just randomly hook up with someone, hope it worked, and skip the outlay, maybe quit my job and live on low income on government payments, but we are talking about consumer preference, so.... ) But I have full reproductive autonomy, something many women globally don't have. This to me is key. Even in a developed country, say someone gets pregnant by accident, a child could be an inferior product. For example, if they can't afford to access a termination, whereas someone on a higher income would be able to. Or if they couldn't afford/access contraceptives. Then the child is a direct result of the constraints of living on a low income. (And again, this example is about the supply of children, not necessarily the demand!) So for me it goes either way, and a huge part of it depends not just on income but on the choices available to women and policy and social settings around reproductive rights and gender equality more broadly.

Hi Daniel. Thanks your interesting insights into developments at Burns Creek in SI. That's good news if it holds. PNG may be different - from first-hand experience visiting settlements in Port Moresby from the 1970s until 2016, I believe the situation is dire - not only the issue of 'raskol' gangs, but more broadly, incorporating health and other issues - one of the impediments to good anaylsis is the lack of statistics on just about everything to do with settlements. The ongoing rapid growth of settlements in Port Moresby will ensure that addressing the issues they generate will take time and considerable effort - and effective coordination of those efforts will be important. Regards

Thanks for the comments, Ashlee. I agree with the following: 1. There should be more women in economics: Enough said. 2. Issues beyond economics - women’s rights, health, infertility, and others - play an important role in fertility: I tried to acknowledge this a bit in the ninth paragraph: “…biological, social, religious, or a result of poor access to contraceptives.” I disagree, however, with the following: 1. Looking at economic factors alone isn’t useful: You don’t say this explicitly so apologies if I am mischaracterizing, but anthropological research - https://www.sciencedaily.com/releases/2013/04/130430161940.htm - has shown that out of sixty-four factors considered relating to family size, the economic ones were most important. This is somewhat vindicated by survey data that says families would have more children if they could afford it. In light of this, it seems economic forces are, if anything, underrated in understanding fertility. 2. Economists conflate demand with supply: Economists also model fertility using childrearing production functions. It doesn’t seem like one approach is necessarily favored over the other - both approaches are well-represented and are useful. But you actually kind of make the case for considering the strengths of using a demand approach when you point out how specialization and economies of scale don’t really make sense with fertility. On your last point, I am definitely not trying to rationalize the decisions of Octomom. That doesn’t mean that economics still can’t rationalize - with some degree of accuracy - fertility choice for most people. That also doesn’t mean that there isn’t a place for discussion about the inequalities and differences existing within fertility choice. As with any aggregate analysis, there is more going on underneath that can be unpacked. But that’s just not what this specific post is about. I’m curious though, if you were to only consider economic factors, would you think children are normal or inferior goods? Interested to hear your thoughts. PS - babies are sometimes cute…

Mobile Phone use in remote Janta Village in West Bengal in India is pretty much similar to Remote Villages in Papua New Guinea. Social change in remote communities and Villages here in Papua New Guinea are much similar. The great barrier is the Cost of Phones and cost of buying flex for voice call and data usage for internet in remote Villages.

Hi Louise, thanks for your comment. The effectiveness of the sporting/alcohol connection came as a bit of a surprise to me. Like you, I have heard it over-and-over in a number of communities over the years. Of course, it's only a temporary relief, but the fact that it works at all is, and is largely self-enforced, is interesting, and worthy of further attention. I'll email you the draft chapter.

Also, in terms of an economic good, normally you achieve efficiencies in production through 'specialisation' — there's very few avenues for this for women in reproduction. Outsourcing pregnancy to a surrogate (huge amount of ethical issues) would be the main one, again usually only accessible to those with high income (Kim Kardashian has done this, for example, due to suffering placenta accretia — most women with this condition would either have to stop having children or gamble on extremely high risk pregnancies). 'Economies of scale' also has its limits in this form of production... Octomum has incurred some pretty significant additional costs, for example. I don't think you can really rationalise this one!