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Under- and over-investment in education: the role of locked-in fertility

Author

Listed:
  • Masao Nakagawa

    (Hiroshima University)

  • Asuka Oura

    (Daito Bunka University)

  • Yoshiaki Sugimoto

    (Kansai University)

Abstract

This research argues that, in the presence of idiosyncratic ability shocks after childbirth, irreversible fertility decisions distort the resource allocation between the quantity and quality of children. In underdeveloped environments, where family size is locked into large levels, education investment places a heavy financial burden on households, which deprives some competent children of learning opportunities. In contrast, in more developed environments, family size is locked into smaller levels, which facilitates education investment even for some children with low aptitude. A redistributive policy to mitigate the distortion is proposed for each stage.

Suggested Citation

  • Masao Nakagawa & Asuka Oura & Yoshiaki Sugimoto, 2022. "Under- and over-investment in education: the role of locked-in fertility," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(2), pages 755-784, April.
    • Handle: RePEc:spr:jopoec:v:35:y:2022:i:2:d:10.1007_s00148-021-00823-8
    DOI: 10.1007/s00148-021-00823-8
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    Cited by:

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    More about this item

    Keywords

    Irreversibility; Quantity-quality trade-off; Human capital; Growth;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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