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Non-Monotonicity of Fertility in Human Capital Accumulation and Economic Growth

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  • Spyridon Boikos

    ()
    (University of Milan.)

  • Alberto Bucci

    ()
    (University of Milan.)

  • Thanasis Stengos

    ()
    (University of Guelph.)

Abstract

This paper investigates the relationship between per-capita human capital investment and the birth rate. Since the consequences of higher fertility (birth rate) on per-capita human capital accumulation (the so-called dilution effect) are not the same (in sign and magnitude) across different groups of countries with different birth rates, we analyze the growth impact of a non-linear dilution-effect. The main predictions of the model (concerning the relationship between population and economic growth rates) are then compared with those of a standard model in which the exogenous birth rate affects linearly and negatively (as postulated by most of the existing theoretical literature) human capital investment at the individual level. By using non-parametric techniques, we find evidence of strong nonlinearities in the total effect of fertility on human capital accumulation. This supports the idea that fertility plays a non-monotonic role in the accumulation of human capital and hence in the growth rate of an economy. The non-monotonic effect of fertility on human capital appears to be valid for OECD, as well as non-OECD countries according to our empirical results.

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Paper provided by University of Guelph, Department of Economics and Finance in its series Working Papers with number 1213.

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Date of creation: 2012
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Handle: RePEc:gue:guelph:2012-13.

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Keywords: Fertility; Population Growth; Economic Growth; Human Capital Investment; Dilution Effects.;

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Cited by:
  1. Spyridon Boikos & Alberto Bucci & Thanasis Stengos, 2012. "Non-Monotonicity of Fertility in Human Capital Accumulation and Economic Growth," Working Papers 1213, University of Guelph, Department of Economics and Finance.

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