Timing of childbirth, capital accumulation, and economic welfare
AbstractThis paper examines the effect of the timing of childbirth on capital accumulation and welfare in a simple overlapping generations model, where each agent lives for four periods and works for two periods. We show that delayed childbearing not only reduces population, but also generates fluctuations in the age composition of workers in the labor force. This causes the aggregate saving rate to fluctuate, which leads to cycles in the capital-labor ratio. When all agents delay childbearing, we analytically show that both the capital-labor ratio and the welfare of all agents can fall in the long run, despite the population decline. When a fraction of agents delay childbearing, it has differential welfare effects on agents depending on their positions in the demographic cycles. The effects of lower lifetime fertility and technological progress are also examined.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 34088.
Date of creation: 13 Oct 2011
Date of revision:
Economic growth; Overlapping generations; Cycles; Population; Delayed childbearing;
Other versions of this item:
- Akira Momota & Ryo Horii, 2013. "Timing of childbirth, capital accumulation, and economic welfare," Oxford Economic Papers, Oxford University Press, vol. 65(2), pages 494-522, April.
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-22 (All new papers)
- NEP-CIS-2011-10-22 (Confederation of Independent States)
- NEP-DEM-2011-10-22 (Demographic Economics)
- NEP-DGE-2011-10-22 (Dynamic General Equilibrium)
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