Externalities, Risk Aversion and the Family Size

The purpose of this article is, first, to argue that the fertility cannot be reduced rapidly through widerspread diffusion of contraceptive practices which has been the main drive of the national policy in population control, because there involves the inescapable externalites in procreation, second, family sizes tend to be larger because of the financial externalities arising from government subsidies to families with children, and finally, the decreasing relative risk aversion of households with wealth may induce the poor to have large family sizes.