Macro-effects of changes in household preferences for children

The basic ideas underlying the analysis in this paper are that family size can be viewed as an economic life cycle decision and that there are decision trade-offs among fertility, consumption, and leisure. A micromodel of life cycle choice is developed and embedded in an economic-demographic macromodel. The macromodel is then used in a series of computer experiments to assess the effects on the population and the economy of changes in household preferences for children. The experiments include “factual” and “counterfactual” simulations of Canadian historical demographic experience and simulations of alternative future scenarios. The analysis and conclusions have general relevance for countries that have been through a fertility boom-and-bust sequence.