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Longevity, Fertility and Economic Growth: Do Environmental Factors Matter?

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  • Dimitrios Varvarigos
  • Intan Zanariah Zakaria

Abstract

Our study examines the effect of environmental factors on the economic decisions regarding fertility. We incorporate health†damaging pollution into a three period overlapping generations model in which life expectancy, fertility and economic growth are all endogenous. We show that environmental factors can cause significant changes to the economy's demographics. In particular, the entrepreneurial choice of less polluting production processes, induced by a tax on emissions, can at some point in time lead to such changes as higher longevity and lower fertility rates. Thus, we provide a novel explanation on the positive relation between fertility rates and pollution. According to this, the causality on this relation may also work from the latter to the former. Furthermore, our model can account for the empirically observed N†shaped correlation between pollution and income per capita.

Suggested Citation

  • Dimitrios Varvarigos & Intan Zanariah Zakaria, 2017. "Longevity, Fertility and Economic Growth: Do Environmental Factors Matter?," Review of Development Economics, Wiley Blackwell, vol. 21(1), pages 43-66, February.
    • Handle: RePEc:bla:rdevec:v:21:y:2017:i:1:p:43-66
    DOI: 10.1111/rode.12239
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    Cited by:

    1. Eugeniy Zabashta, 2019. "Theoretical Fundamentals Of Formation Of Innovative Development Of Entrepreneurship," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 5(4).
    2. Dugan, Anna & Prskawetz, Alexia & Raffin, Natacha, 2022. "The Environment, Life Expectancy and Growth in Overlapping Generations Models: A Survey," ECON WPS - Working Papers in Economic Theory and Policy 01/2022, TU Wien, Institute of Statistics and Mathematical Methods in Economics, Economics Research Unit.
    3. Lina Shenderivska & Olga Guk, 2018. "Enterprises Development: Management Model," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 4(1).

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