Fertility choices, Demographics and Automation

Derick Almeida and Tiago Sequeira

No 2023-05, CeBER Working Papers from Centre for Business and Economics Research (CeBER), University of Coimbra

Abstract: In this paper we study a theoretical link between the effects of increased automation on labor markets, and the fertility decisions of a representative household that is replaced by robots in the production of tasks. We develop a framework in which children provide utility and impose an opportunity cost to the household due to lost labor income. We show that fertility rate changes are the result of an optimal response to wage variations after the economy is hit by a shock that increases the design quality of robots used in production. Using this model, we characterize an initial equilibrium and simulate the effect of a 10% increase in robot productivity on important endogenous variables, including wages, and find that, in the absence of fixed costs to raising children, the fertility rate increases by approximately 3.4%.

Keywords: Automation; Robots; Tasks; Fertility (search for similar items in EconPapers)
JEL-codes: I24 J13 J22 J24 J31 O15 O33 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2023-06
New Economics Papers: this item is included in nep-dge, nep-gro and nep-inv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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