Cost-Benefit theory of Population

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Cost-Benefit theory of Population

According to this theory the additional population growth is treated in two ways (1) as an asset and (2) as a liability ‘a’ ‘b’ & ‘c’ are utility derived from additional children (i) a is the amount of utility or satisfaction from the possession of an additional child, this remains constant whether to a rich person or a poor person.

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In urban areas, the people to a greater extent educated, and have a nuclear family concept in which both wife and husband is employed. If such a family wants to have an additional child, then they have to look into the concept of cost to develop the child. It is one of the basic objective of human psychology, that is. if you have a child, then he should be provided best food, best clothing and best education. The aim is to develop the child, rather than an asset or utility aspect. Due to additional child a family may undergo financial problems. It can be divided into two types of costs (a) Direct cost (b) Indirect cost.

a) Direct cost is the amount of money incurred to look after the child (to develop the child-food, education etc) and when the woman is on maternity leave. She may have to Jose certain amount of money (In case if maternity leave is not available, leave without pay) is to be taken. (b) Indirect cost is the amount of freedom or loss of entertainment due additional child to the family. A family with more number of children may not be able to go for entertainment etc

On the other hand urban people may be employ in government. semi-governments or private companies, where pensions gratuities, insurance and other benefits are available. Due to this. they concentrate more on the development of a child rather then taking child as an asset.

Population policy makers must look into this economics aspect and the so called ‘governance’ of public authority must concentrate on this. In many developing countries, the governments declare their social security measure only on a temporary bases, This they may announce to obtain the votes to get elected.

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Cost-Benefit theory of Population