Income Inquality, Fertility Choice, and Economic Growth: Theory and Evidence

Lawrence Khoo () and Benjamin Dennis

Working Papers from Harvard - Institute for International Development

Abstract: The growing literature on inequality and economic growth has focused on the adverse effects of income inequality on investment. We focus on the negative relationship between inequality and economic growth, hypothesising that inequality lowers economic growth by raising the fertility rate. Unlike other studies, our analysis does not rely on incomplete markets, or on parental altruism. Instead, it uses the fact that a larger number of children reduces the riskiness of the financial payoff from having children, a factor which is more important for the poor than for the wealthy. Cross country econometric tests using a newly collated dataset of income distribution support the proposition that much of the growth enhancing effects of an equitable income distribution may come from its negative effect on fertility rates.

Keywords: FERTILITY; INCOME; ECONOMIC GROWTH (search for similar items in EconPapers)
JEL-codes: J13 O15 O40 (search for similar items in EconPapers)
Pages: 18 pages
Date: 1999
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:harvid:687

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