Endogenous fertility and growth in a model with old age support

Rupa Chakrabarti ()
Additional contact information
Rupa Chakrabarti: Department of Economics, Wellesley College, Wellesley, MA 02181-8260, USA

Economic Theory, 1999, vol. 13, issue 2, 393-416

Abstract: This paper examines the interrelationship between capital accumulation, fertility, and growth by introducing an endogenous fertility decision into Diamond's (1965) neoclassical growth model. Under the assumptions that children provide old age support and that individuals incur a variable time cost of raising children, it investigates the potential for cyclical fluctuations in the capital-labor ratio and fertility, as well as for development trap phenomena to be observed. It is shown that when capital and labor are highly substitutable in production, there is a unique steady state equilibrium, and either damped or undamped oscillations in fertility and the capital-labor ratio may occur. However, when the elasticity of substitution between capital and labor is less than one, two steady state equilibria may exist; one with a high capital-labor ratio and a high rate of population growth, and the other with a lower capital-labor ratio as well as a lower population growth rate. The former is a saddle, while the latter may be either a source or a sink. In the latter case development traps are possible.

Keywords: Endogenous; fertility; ·; Old; age; support; ·; Growth. (search for similar items in EconPapers)
JEL-codes: E13 E20 E32 O41 (search for similar items in EconPapers)
Date: 1999-02-17
Note: Received: June 16, 1997; revised version: December 18, 1997
References: Add references at CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
http://link.springer.de/link/service/journals/00199/papers/9013002/90130393.pdf (application/pdf)
Access to the full text of the articles in this series is restricted

Related works:
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: https://EconPapers.repec.org/RePEc:spr:joecth:v:13:y:1999:i:2:p:393-416

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2

Access Statistics for this article

Economic Theory is currently edited by Nichoals Yanneils

More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().