Banking on fewer children: Financial intermediation, fertility and economic development
AbstractThis paper shows that financial intermediation can influence fertility and labor allocation decisions by raising market wages. The increase in wages induces some households to abandon "traditional" labor intensive methods of production managed at the household level and supply labor to "modern" sector firms. Since it is optimal for households in the modern sector to have fewer children, the labor allocation decision leads to lower national fertility. A panel VAR using financial intermediation, fertility and industrial employment share data in 87 countries is estimated. The empirical results show that the data are consistent with the theoretical predictions.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Population Economics.
Volume (Year): 12 (1999)
Issue (Month): 4 ()
Note: Received: 20 October 1997/Accepted: 31 August 1998
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Web page: http://link.springer.de/link/service/journals/00148/index.htm
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Find related papers by JEL classification:
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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- Filoso, Valerio & Papagni, Erasmo, 2010.
"Fertility Choice and Financial Development,"
25930, University Library of Munich, Germany.
- HorvÃ¡th, Csilla & Wieringa, Jaap E., 2003. "Combining time series and cross sectional data for the analysis of dynamic marketing systems," Research Report 03F13, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
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