Consumption smoothing, the cost of children, and family size desired in poor households: empirical evidence from family planning villages in Sintang Regency, the Province of West Kalimantan, Indonesia

Abstract

There are many factors that may prevent individuals from achieving consumption smoothing, especially for poor individuals or households. Liquidity barriers for the poor can be overcome by pension programs financed by the government and intergenerational transfers. This research aims at investigating determinants of the family size decisions in poor households. This research uses primary data from survey questionnaires conducted among 447 poor households selected in Family Planning Villages throughout Sintang Regency. The family size decision is only affected by parents’ expectation of an intergenerational transfer. This variable has a significant positive effect, and the possibility of an old-age pension scheme provided by the government does not significantly affect the family size decision. This may be due to the fact that there has been no pension scheme for poor households in Indonesia. The cost of children does not influence the poor household’s family size decision. This is probably due to family package assistance provided by the government which can help reduce the cost of children. The cost of daily living, health and education costs have a significant positive effect on the burden of these costs. The findings of this study indicate that the family assistance package provided by the government does not encourage poor households to have a larger family, meaning that the provision of family assistance packages does not contradict the Family Planning Program. It also provides evidence that the government’s pension scheme for poor households can be also considered as a means of controlling the population growth, because this scheme will lower the expectation of poor households to receive intergenerational transfers.