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Aid and Fertility: What Does the Cross-Country Evidence Show?

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  • David Cuberes

    ()
    (Department of Economics, The University of Sheffield)

  • Kevin Tsui

    ()
    (The John E. Walker Department of Economics, Clemson University)

Abstract

This paper examines the effects of foreign aid on fertility rates in recipient countries using Rajan and Subramanian’s (2008) cross-sectional and panel methods. Our cross-section results suggest that foreign aid has a positive effect on fertility. Interestingly, social sector aid (but not economic aid) is responsible for this demographic effect. The panel evidence confirms the positive effect of foreign aid on total fertility rates, and that social aid is more relevant than economic aid. Given that the literature has found no robust relationship between foreign aid and economic growth, our findings raise the possibility of an aid-induced population poverty trap.

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File URL: http://www.shef.ac.uk/economics/research/serps/articles/2011_024.html
File Function: First version, 2011
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Bibliographic Info

Paper provided by The University of Sheffield, Department of Economics in its series Working Papers with number 2011024.

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Length: 20 pages
Date of creation: Dec 2011
Date of revision:
Handle: RePEc:shf:wpaper:2011024

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Keywords: foreign aid; population growth; Malthusian traps;

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References

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  1. Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2004. "On The Empirics of Foreign Aid and Growth," Economic Journal, Royal Economic Society, vol. 114(496), pages F191-F216, 06.
  2. Leonid V. Azarnert, 2009. "Foreign Aid, Fertility and Population Growth:Evidence from Africa," Working Papers 2009-12, Department of Economics, Bar-Ilan University.
  3. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
  4. Blackorby, C. & Bossert, W. & Donaldson, D., 1996. "Foreign Aid and Population Policy: Some Ethical Considerations," Working Papers 9608, University of Waterloo, Department of Economics.
  5. William Easterly, 2006. "Reliving the 1950s: the big push, poverty traps, and takeoffs in economic development," Journal of Economic Growth, Springer, vol. 11(4), pages 289-318, December.
  6. van de Walle, Dominique & Mu, Ren, 2007. "Fungibility and the flypaper effect of project aid: Micro-evidence for Vietnam," Journal of Development Economics, Elsevier, vol. 84(2), pages 667-685, November.
  7. Michael Clemens & Steven Radelet & Rikhil Bhavnani, 2004. "Counting Chickens When They Hatch: The Short-term Effect of Aid on Growth," Working Papers 44, Center for Global Development.
  8. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
  9. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, vol. 40(2), pages 289-329, February.
  10. Galor, Oded, 2004. "From Stagnation to Growth: Unified Growth Theory," CEPR Discussion Papers 4581, C.E.P.R. Discussion Papers.
  11. George Economides & Sarantis Kalyvitis & Apostolis Philippopoulos, 2008. "Does foreign aid distort incentives and hurt growth? Theory and evidence from 75 aid-recipient countries," Public Choice, Springer, vol. 134(3), pages 463-488, March.
  12. Hristos Doucouliagos & Martin Paldam, 2005. "Aid Effectiveness on Growth. A Meta Study," Economics Working Papers 2005-13, School of Economics and Management, University of Aarhus.
  13. Anca Cotet & Kevin K. Tsui, 2010. "Resource Curse or Malthusian Trap? Evidence from Oil Discoveries and Extractions," Working Papers 201001, Ball State University, Department of Economics, revised Mar 2010.
  14. Chatterjee, Santanu & Giuliano, Paola & Kaya, Ilker, 2007. "Where Has All the Money Gone? Foreign Aid and the Quest for Growth," IZA Discussion Papers 2858, Institute for the Study of Labor (IZA).
  15. Thierry Tressel & Alessandro Prati, 2006. "Aid Volatility and Dutch Disease," IMF Working Papers 06/145, International Monetary Fund.
  16. David N. Weil & Joshua Wilde, 2009. "How Relevant Is Malthus for Economic Development Today?," American Economic Review, American Economic Association, vol. 99(2), pages 255-60, May.
  17. Leonid V. Azarnert, 2008. "Foreign Aid, Fertility and Human Capital Accumulation," Economica, London School of Economics and Political Science, vol. 75(300), pages 766-781, November.
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