Industrialization substantially reduced the economic benefits of children. Economic development shifted the locus of work from the farm to the city and raised the age at which children began work, thus making them less valuable to parents as a source of production and income. Growing opportunities for accumulating savings in banks, securities, and annuities virtually eliminated the need for children as a method of saving. And the expanding role of government in providing retirement benefits, health insurance, unemployment insurance, and other social programs diminished the importance of having one’s own children as a source of insurance later in life, even though society as a whole depends upon future generations to pay the retirement benefits of the preceding ones.
While the economic benefits of children have been decreasing, the costs of raising them have been increasing. Some of this increase is associated with the shift from rural to urban life, a shift that caused more than proportionate increases in the prices of housing and food. However, the prices of some services (adjusted for quality), such as education and medical care, are probably lower in urban than in rural settings. Thus, as the period of child-rearing has lengthened and expenditures for human services have become more important relative to bare necessities, rural birth rates have followed urban rates in their downward course.