ABSTRACT
This chapter discusses how the child-bearing externalities may arise and evaluates them for contemporary India. Despite the theoretical attention devoted to the potentially important role of externalities and the policy importance attached to the topic, apparently no work at all has been done to estimate the likely magnitude of child-bearing externalities in developing countries. A positive externality to child-bearing may arise if there are public goods because the larger the population, the more thinly the cost of the public good can be spread over the population, reducing the individual tax burden and, perhaps, leading to a greater level of consumption of the public good by all. If public debt must be repaid by the generations, this would lead to a positive externality to child-bearing, since with a larger population, the burden falls more lightly on each taxpayer. If, on the other hand, the debt can simply grow over time in proportion to the population, then there is no externality.
