ENDOGENOUS FERTILITY WITH A SIBSHIP SIZE EFFECT

Elise Brezis () and Rodolphe Dos Santos Ferreira

Macroeconomic Dynamics, 2016, vol. 20, issue 8, 2046-2066

Abstract: Since the seminal work of Becker, the dynamics of endogenous fertility has been based on the trade-off faced by parents between the quantity and the quality of their children. However, in developing countries, where child labor is an indispensable source of household income, parents actually incur a negative cost by having an extra child, so that the trade-off disappears. The purpose of this paper is to restore the Beckerian quantity–quality trade-off when intergenerational transfers are upstream, in order to keep fertility endogenous. We do that by adding a negative “sibship size effect” on human capital formation to the standard Becker model. With a simple specification, we obtain multiplicity of steady states or, more fundamentally, the possibility of a jump from a state with high fertility and low income to a state with low fertility and high income, triggered by a continuous increase in the productivity of human capital formation.

Date: 2016
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Related works:
Working Paper: Endogenous fertility with a sibship size effect (2016)
Working Paper: Endogenous fertility with a sibship size effect (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cup:macdyn:v:20:y:2016:i:08:p:2046-2066_00

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