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Fertility, Education, and Market Failures

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  • Sylvain Dessy

    ()
    (Departement d’economique, Universite Laval, Sainte-Foy, QC)

  • Stephane Pallage

    ()
    (Departement des sciences ´economiques, Universite du Quebec `a Montreal)

Abstract

We show that coordination failures may be part of an explanation for the demographic differences between rich and poor countries and their differing attitudes towards the use of child labor. Our analysis is carried out within a two-period, general equilibrium model with endogenous fertility, parental investment in children’s education and ?rms’ tradeoff between traditional technologies and the adoption of skill-intensive, modern ones. The model exhibits multiple equilibria due to the lack of a coordination mechanism between parental decisions on the quantity and the quality of children and entrepreneurs’ technology choices.

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Bibliographic Info

Article provided by African Finance and Economic Association in its journal Journal of African Development.

Volume (Year): 5 (2002)
Issue (Month): 2 ()
Pages: 71-85

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Handle: RePEc:afe:journl:v:5:y:2002:i:2:p:71-85

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Web page: http://afea.info/journal-of-african-development.html
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Keywords: Endogenous fertility; education; child labor; skill-biased technology; welfare; multiple equilibria; coordination;

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  7. Dessy, Sylvain & Pallage, Stephane, 2003. "Taxes, inequality and the size of the informal sector," Journal of Development Economics, Elsevier, vol. 70(1), pages 225-233, February.
  8. Robert J. Barro & Gary S. Becker, . "Fertility Choice in a Model of Economic Growth," University of Chicago - Population Research Center 88-8, Chicago - Population Research Center.
  9. Dessy, Sylvain & Pallage, Stéphane, 2001. "Why Banning the Worst Forms of Child Labour Would Hurt Poor Countries," Cahiers de recherche 0109, Université Laval - Département d'économique.
  10. Acemoglu, D., 1994. "Search in the Labor market: Incomplete Contracts and Growth," Working papers 94-23, Massachusetts Institute of Technology (MIT), Department of Economics.
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  18. Basu, Kaushik, 1998. "Child labor : cause, consequence, and cure, with remarks on International Labor Standards," Policy Research Working Paper Series 2027, The World Bank.
  19. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  20. Ranjan, Priya, 2001. "Credit constraints and the phenomenon of child labor," Journal of Development Economics, Elsevier, vol. 64(1), pages 81-102, February.
  21. Dessy, Sylvain E. & Pallage, Stephane, 2001. "Child labor and coordination failures," Journal of Development Economics, Elsevier, vol. 65(2), pages 469-476, August.
  22. Stephane Pallage & Michel A. Robe, 2003. "On the Welfare Cost of Economic Fluctuations in Developing Countries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 677-698, 05.
  23. Peter Howitt, 2000. "Endogenous Growth and Cross-Country Income Differences," American Economic Review, American Economic Association, vol. 90(4), pages 829-846, September.
  24. Glomm, Gerhard, 1997. "Parental choice of human capital investment," Journal of Development Economics, Elsevier, vol. 53(1), pages 99-114, June.
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