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From Malthus to modern growth: child labor, schooling and human capital

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  • Edgar Vogel

    ()
    (Munich Center for the Economics of Aging (MEA))

Abstract

This paper develops a dynamic general equilibrium model of fertility, human capital accumulation, child labor and uncertain child survival focusing on the qualitative and quantitative effect of declining mortality on household decisions and economic development. Due to uncertainty about child survival, parents have a precautionary demand for children. Rising survival probability leads to falling fertility, eventually to investment into schooling and the demise of child labor. Child labor can be an obstacle to development since it lowers the incentives of parents to educate children. Furthermore, the paper argues that the decline of precautionary child demand as a consequence of falling mortality is not sufficient to generate a demographic transition. Falling mortality can only explain a relatively small part of the fertility decline. A sizable reduction in fertility can only be achieved by human capital investment and the induced quantity-quality trade off.

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Paper provided by Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy in its series MEA discussion paper series with number 09180.

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Date of creation: 20 Apr 2009
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Handle: RePEc:mea:meawpa:09180

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