Parents are viewed as productive agents who make interrelated decisions regarding their family size, labor force participation, expenditures and intrahousehold distribution of resources in the face of constraints imposed by their resource limitations and a given 'production technology'. The study utilized data on preschool and shool-age children obtained from a village-level survey. One finding, that mother's work in the formal labour marker is detrimental to child nutrition, is unexpected and has important implications for policies designed to augment income through formal-sector job creation. The analysis reveals that malnutrition and high fertility have adverse effects on the mental ability of the school-age children in the sample. By controlling for the environmental effects on intellectual development, the study offers some evidence to support the still-debatable contention that malnutrition has a direct, independent link to poor mental ability.-from Author