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Inequality and Growth : Why Differential Fertility Matters

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Author Info
DE LA CROIX, David () (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
DOEPKE, Matthias () (departement of Economics, UCLA, Los Angeles)

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Abstract

We argue the inequality and growth are linked through differential fertility and the accumulation of human capital. We build an overlapping-generations model in which dynasties differ in their initial endowment with human capital. Growth, the income distribution, and fertility are endogenous. Due to a quantity-quality tradeoff, families with less human capital decide to have more children and invest less in education. When initial inequality is high, large fertility differentials lower the growth rate of average human capital, since poor families who invest little in education make up a large fraction of the population in the next generation. A calibrated model shows that this fertility-differential effect is quantitatively important. We also provide empirical evidence to confirm the links between inequality, differential fertility and growth suggested by the model.

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Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) Discussion Paper with number 2001008.

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Length: 27
Date of creation: 00 Apr 2001
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Handle: RePEc:ctl:louvir:2001008

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  2. Lucas Bretschger, 2004. "Natural resource scarcity and long-run development: central mechanisms when conditions are seemingly unfavourable," Economics working paper series 03/29, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  3. Stephan Klasen & David Lawson, 2007. "The Impact of Population Growth on Economic Growth and Poverty Reduction in Uganda," Departmental Discussion Papers 133, University of Goettingen, Department of Economics, revised 25 May 2007. [Downloadable!]
  4. S. Brock Blomberg & Gregory Hess & Athanasios Orphanides, 2004. "The Macroeconomic Consequences of Terrorism," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
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  5. Andreas Schäfer, 2004. "The Political Economy and the Interaction between Endogenous Fertility and Inequality," DEGIT Conference Papers c009_041, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  6. Fabrice Murtin, 2006. "American Economic Development Since the Civil War or the Virtue of Education," CEP Discussion Papers dp0765, Centre for Economic Performance, LSE. [Downloadable!]
  7. Oded Galor & Andrew Mountford, 2008. "Trading Population for Productivity: Theory and Evidence," Working Papers 2008-2, Brown University, Department of Economics. [Downloadable!]
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  8. Aiyar, Shekhar & Dalgaard, Carl-Johan & Moav, Omer, 2006. "Technological Progress and Regress in Pre-Industrial Times," CEPR Discussion Papers 5454, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  9. David de la Croix & Axel Gosseries, 2007. "Population Policy through Tradable Procreation Entitlements," Working Papers 62, ECINEQ, Society for the Study of Economic Inequality. [Downloadable!]
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  10. Joanna Alexopoulos & Tiago V. de V. Cavalcanti, 2006. "Cheap Home Goods And Persistent Inequality," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 165, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
  11. Andreas Schäfer, 2002. "Endogenous Growth with Endogenous Fertility and Social Discrimination in Education," Thuenen-Series of Applied Economic Theory 35, University of Rostock, Institute of Economics, Germany. [Downloadable!]
  12. Concetta, MENDOLICCHIO, 2005. "Gender and private returns to education : a cross-European analysis," Université catholique de Louvain, Département des Sciences Economiques Working Paper 2005056, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
  13. Isaac Ehrlich & Jinyoung Kim, 2004. "The Evolution of Income and Fertility Inequalities over the Course of Economic Development: A Human Capital Perspective," NBER Working Papers 10890, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  14. Amparo Castelló-Climent, 2004. "A Reassessment Of The Relationship Between Inequality And Growth: What Human Capital Inequality Data Say?," Working Papers. Serie EC 2004-15, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  15. Carlos E. Posada & Eliana Carolina Rubiano, 2007. "El crecimiento económico internacional en la segunda mitad del siglo XX ¿que factores lo determinaron?," BORRADORES DE ECONOMIA 003956, BANCO DE LA REPÚBLICA. [Downloadable!]
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