The paper "Microeconomic Theory of Fertility" is a wonderful example of an assignment on macro and microeconomics. The microeconomic theory of fertility involves an application of the “ microeconomic theory of consumer behavior” to the decisions made by couples regarding the size of their family. The theory compares the benefits and costs of children. The benefits of children are things such as extra handwork and the provision of security in old age. On the other hand, the costs of children are the expenses involved in raising the children, educating them, and providing other things that children require.
If the costs involved in raising children are higher compared to benefits, the tendency to have more children will reduce. On the other hand, if the benefits of having children are higher than the costs involved, then the propensity to have more children will increase. In many developing countries, which are characterized by high populations, many governments impose disincentives to ensure that couples have smaller family sizes. Such disincentives emphasize that having many children is associated with high costs and thus seeks to reduce the number of children that couples or individuals can have.
The disincentives include negative sanctions by the government on couples or individuals that have a certain number of children and the promotion of family planning. The effect of such disincentive campaigns is that they lead to families or individuals having a certain number of children that are deemed desirable, which reduces the family size. Using the Harris-Todaro model to explain the origin of urban unemploymentThe Harris-Todaro model attributes migration from rural areas to urban areas to the occurrence of considerably more favorable economic conditions in urban areas.
And this is what ultimately leads to unemployment in urban areas. According to the model, migrants make comparisons of wages in the urban area relative to what is earned in the rural area. If the wages in the urban area are higher, people will be motivated to move from rural areas to the urban areas. If people expect to earn a much higher income in urban areas than in rural areas, they will migrate to the urban area even if the prospect of getting employment in the urban area is low and the actual income is low.
The result is that many people move to urban areas in search of employment opportunities that are scarce.