Interregional Fertility Differentials and Agglomeration

Tadashi Morita and Kazuhiro Yamamoto

The Japanese Economic Review, 2018, vol. 69, issue 2, 171-188

Abstract: In this study, we construct an interregional trade model that includes endogenous fertility rates. The presented model shows that the agglomeration of manufacturing firms in a large region causes fertility rates to become lower than in a small region. We also find that a decrease in transportation costs results in the agglomeration of manufacturing firms, which lowers fertility rates in both large and small regions. In addition, comparing the competitive equilibrium with the optimal equilibrium, the fertility rates may be inefficiently small.

Date: 2018
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https://doi.org/10.1111/jere.12174

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