This study contains evidence on the importance of chronic disease burden on human-capital and fertility decisions in developing regions. The episode analyzed is the eradication of hookworm disease in the American South (c. 1910). In previous work (Bleakley 2002), it was shown that the hookworm eradication led to a significant increase in school attendance and literacy. The present study shows that this increase in human capital was accompanied by a fertility decrease that was both economically and statistically significant. A decline in the hookworm infection rate from 40 to 20% is associated with a decline in fertility that amounts to 40% of the entire fertility decline in the American South between 1910 and 1920. These results can be used to test a number of theoretical models on the interaction of fertility and human capital investments in growth. It provides broad support for non-linear budget sets in the number and quality of children as first analyzed by Becker-Lewis (1973). It also strengthens the empirical support for the emerging literature (e.g. Becker, Murphy and Tamura (1990), Doepke (2002) and Soares (2002)) linking human capital investment and fertility in models of economic growth and demographic transitions. The evidence presented here rejects the Barro-Becker (1988) formulation with a single dynastic budget set.
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