This paper examines a novel mechanism linking fertility and growth. There are three components to the model. First, increases in capital per worker raise women's relative wages, since capital is more complementary to women's labour input than to men's. Second, increasing women's relative wages reduces fertility by raising the cost of children more than household income. Third, lower fertility raises the level of capital per worker. This positive feedback loop generates a demographic transition: a rapid decline in fertility accompanied by accelerated output growth.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
1157.
Find related papers by JEL classification: J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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