Human Capital, Mortality and Fertility: A Unified Theory of the Economic and Demographic Transition

Matteo Cervellati () and Uwe Sunde ()

No 2905, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: This paper provides a unified theory of the economic and demographic transition. Individuals make optimal decisions about fertility, education of their children and the type and intensity of the investments in their own education. These decisions are affected by different dimensions of mortality and technological progress which change endogenously during the process of development. The model generates an endogenous transition from a regime characterized by limited human capital formation, little longevity, high child mortality, large fertility and a sluggish income and productivity growth to a modern growth regime in which lower net fertility is associated with the acquisition of human capital and improved living standards. Unlike previous models, the framework emphasizes the education composition of the population in terms of the equilibrium share of educated individuals, and differential fertility related to education. The framework explores the roles of different dimensions of mortality, wages and schooling in triggering the transition. The dynamics of the model are consistent with empirical observations and stylized facts that have been difficult to reconcile so far. For illustration we simulate the model and discuss the novel predictions using historical and cross-country data.

Keywords: long-term development; demographic transition; endogenous life expectancy; child mortality; heterogeneous human capital; technological change; industrial revolution (search for similar items in EconPapers)
JEL-codes: E10 J10 O10 O40 O41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-hea, nep-hrm and nep-mac
Date: Written
View list of references View citations in EconPapers

Downloads: (external link)
ftp://repec.iza.org/RePEc/Discussionpaper/dp2905.pdf (application/pdf)

Related works:
Working Paper: Human Capital, Mortality and Fertility: A Unified Theory of the Economic and Demographic Transition (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:iza:izadps:dp2905

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute for the Study of Labor (IZA)
Address: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Contact information at EDIRC.
Series data maintained by Mark Fallak ().