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Population Growth Overshooting and Trade in Developing Countries

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  • Ulla Lehmijoki
  • Tapio Palokangas

Abstract

This paper examines a developing economy by a family-optimization model in which the number of children is a normal good in preferences. Trade liberalization generates two effects: an income effect, which raises population growth in the short run; and a gender wage effect, which decreases that in the long run. With higher income, families invest more in capital. Because female labor is more complementary to capital, a higher level of investment increases women's relative wages and attracts more of them from child rearing into production. Consequently, the population growth rate falls below the original level in the long run. This paper also provides some empirical evidence on these results.

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Bibliographic Info

Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c011_025.

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Length: 23 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:deg:conpap:c011_025

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Keywords: Keywords: population growth; international trade;

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  1. Gary S. Becker & Kevin M. Murphy & Robert Tamura, . "Human Capital, Fertility, and Economic Growth," University of Chicago - Population Research Center 90-5a, Chicago - Population Research Center.
  2. Fisher, Walter H. & Hof, Franz X., 2005. "Status seeking in the small open economy," Journal of Macroeconomics, Elsevier, vol. 27(2), pages 209-232, June.
  3. Sachs, J-D & Warner, A-M, 1996. "Sources of Slow Growth in African Economies," Papers 545, Harvard - Institute for International Development.
  4. Eric Neumayer & Indra de Soysa, 2005. "Globalization, Women’s Economic Rights and Forced Labor," Labor and Demography 0509011, EconWPA.
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  6. Oded_Galor, 2004. "From Stagnation to Growth:Unified Growth Theory," Working Papers 2004-15, Brown University, Department of Economics.
  7. David N. Weil & Oded Galor, 1999. "From Malthusian Stagnation to Modern Growth," American Economic Review, American Economic Association, vol. 89(2), pages 150-154, May.
  8. Galor, Oded & Weil, David N, 1996. "The Gender Gap, Fertility, and Growth," American Economic Review, American Economic Association, vol. 86(3), pages 374-87, June.
  9. Alessandro Cigno, 1998. "Fertility decisions when infant survival is endogenous," Journal of Population Economics, Springer, vol. 11(1), pages 21-28.
  10. Robert Tamura, 2004. "Human capital and economic development," Working Paper 2004-34, Federal Reserve Bank of Atlanta.
  11. Oostendorp, Remco, 2004. "Globalization and the gender wage gap," Policy Research Working Paper Series 3256, The World Bank.
  12. Oded_Galor & Andrew Mountford, 2006. "Trade and the Great Divergence: The Family Connection," Working Papers 2006-01, Brown University, Department of Economics.
  13. Razin, Assaf & Ben-Zion, Uri, 1975. "An Intergenerational Model of Population Growth," American Economic Review, American Economic Association, vol. 65(5), pages 923-33, December.
  14. Corneo, Giacomo & Jeanne, Olivier, 2001. "On relative-wealth effects and long-run growth," Research in Economics, Elsevier, vol. 55(4), pages 349-358, December.
  15. Gary S. Becker & Robert J. Barro, . "A Reformulation of the Economic Theory of Fertility," University of Chicago - Population Research Center 85-11, Chicago - Population Research Center.
  16. Corneo, Giacomo & Jeanne, Olivier, 1997. "On relative wealth effects and the optimality of growth," Economics Letters, Elsevier, vol. 54(1), pages 87-92, January.
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Cited by:
  1. Ulla Lehmijoki & Tapio Palokangas, 2010. "Trade, population growth, and the environment in developing countries," Journal of Population Economics, Springer, vol. 23(4), pages 1351-1370, September.

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