The aim of this research is to structure a theoretical model to show that insufficient and inefficient access to social security benefits and investment in capital markets distorts fertility behaviors, which leads people into poverty trap. Specifically, our model treats fertility behavior as endogenous. We select a group of Thai farmers as a study group in this research because Thai farmers are not covered under the Thai Social Security Program and they could hardly access the investment capital markets. We will then derive and propose the second best solution to a problem of poverty trap among Thai farmers. Such second best solution should be applicable to other groups of the poor with some adjustments.
