Why Gender Matters in Economics All Other Goods, x Couple's Indifference Curves L New Budget Line 0 N\"N Number of Children, I: FIGURE 8.3 The effect of the cost of children on fertility In summary, the theory of fertility choice pre- dicts that increases in income will increase fertil- ity and that increases in the cost of children will decrease fertility. What evidence is there for this? I offer some interesting historical evidence from England. As mentioned in the introduction to this chap- ter, all the developed countries of today have gone through a transition from high to low fertility. This transition began in England only around 1880, rather late in comparison to the timings in the other developed countries of today. The per capita income in England had been rising for nearly 100 years before that as a result of the Industrial Revolution. During this period, by the standards of the day, there was rapid population 446 Why Gender Matters in Economics growth in England. This increase in population was consistent with the theory of fertility choice, which predicts that income increases should translate into fertility increases if children are normal goods. Thomas Malthus also drew the link between income and fertility in his famous work of 1798, An Essay on the Principle of Population. He argued that in times of abundance, when income levels rise above subsistence levels, fertility rises as well. The increase in fertility reduces the wage rate and brings income back to the subsistence level. If income falls below the subsistence level, on the other hand, some people die from starva tion. The decline in population raises wages, and the rest of the people are back at a subsistence- level wage. This Malthusian theory of population is consistent with the positive income effect of wage increases on fertility. What Malthus did not allow forand this was why his theory went woefully wrong in modern timeswas that other factors might intervene that could prevent the alleged inexorable movement toward subsistence level incomes. The demographer John Caldwell (1980) has identied the move to universal education as hav- ing signicantly hastened the transition to low fertility in the now developed countries.5 Among other things, the laws calling for compulsory edu cation raised the cost of children to parents and thus lowered marital fertility. The timing is uncanny. England's Education Act of 1870 started the move toward compulsory education, which then became law in 1880. As Caldwell points out, marital fertility began to decrease in England and Wales between 1871 and 1881. Other European countries saw fertility transitions that coincided with laws making education compulsory. Why 447