Abstract ：
We analyze fertility decisions of families using an intergenerational exchange model that might be applicable to less-developed economies. Parents who have children for elderly support increase the number of children they have when the probability of becoming dependent rises. Rises in the children’s wage rates decrease the fertility rate when the elasticity of marginal utility of family care is low. In that case, children’s care might be replaced eventually by market care insurance along with economic development. Fertility declines do not derive from a quantity–quality tradeoff of children but from decreases in children’s needs for bequests with wage rises.

Keywords : bequests, elderly care, fertility, intergenerational exchange

JEL code: D13, D64, D74, J13, J14