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The Effect of Interventions to Reduce Fertility on Economic Growth

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Abstract

We assess quantitatively the effect of exogenous reductions in fertility on output per capita. Our simulation model allows for effects that run through schooling, the size and age structure of the population, capital accumulation, parental time input into child-rearing, and crowding of fixed natural resources. The model is parameterized using a combination of microeconomic estimates, data on demographics and natural resource income in developing countries, and standard components of quantitative macroeconomic theory. We apply the model to examine the effect of an intervention that immediately reduces TFR by 1.0, using current Nigerian vital rates as a baseline. For a base case set of parameters, we find that an immediate decline in the TFR of 1.0 will raise output per capita by approximately 13.2 percent at a horizon of 20 years, and by 25.4 percent at a horizon of 50 years.

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File URL: http://web.williams.edu/Economics/wp/AshrafWeilWildeFertility.pdf
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Bibliographic Info

Paper provided by Department of Economics, Williams College in its series Center for Development Economics with number 2011-07.

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Length: 46 pages
Date of creation: Aug 2011
Date of revision:
Handle: RePEc:wil:wilcde:2011-07

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Keywords: Fertility; Population size; Age structure; Child quality; Worker experience; Labor force participation; Capital accumulation; Natural resources; Income per capita;

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References

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  1. Yishay Maoz & Moshe Hazan & Matthias Doepke, 2008. "The Baby Boom and World War II: A Macroeconomic Analysis," 2008 Meeting Papers 668, Society for Economic Dynamics.
  2. Francesco Caselli, 2007. "The Marginal Product of Capital," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 122(2), pages 535-568, 05.
  3. Mikhail Golosov & Larry E. Jones & Michele Tertilt, 2004. "Efficiency with Endogenous Population Growth," NBER Working Papers 10231, National Bureau of Economic Research, Inc.
  4. 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.
  5. Kyung-Mook Lim & David N. Weil, 2003. "The Baby Boom and the Stock Market Boom," Working Papers 2003-07, Brown University, Department of Economics.
  6. Richard Rogerson & Douglas Gollin, 2009. "The Greatest of All Improvements: Roads, Agriculture, and Economic Development in Africa," 2009 Meeting Papers, Society for Economic Dynamics 759, Society for Economic Dynamics.
  7. David E. Bloom & David Canning & Günther Fink & Jocelyn E. Finlay, 2007. "Fertility, Female Labor Force Participation, and the Demographic Dividend," NBER Working Papers 13583, National Bureau of Economic Research, Inc.
  8. Quamrul Ashraf & Ashley Lester & David Weil, 2008. "When Does Improving Health Raise GDP?," Working Papers 2008-7, Brown University, Department of Economics.
  9. Assaf Razin & Efraim Sadka, 1995. "Population Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262181606, December.
  10. World Bank, 2005. "Where is the Wealth of Nations? Measuring Capital for the 21st Century," World Bank Publications, The World Bank, number 7505, October.
  11. Ronald D Lee & Andrew Mason & Tim Miller, 1998. "Saving, Wealth, and Population," Working Papers, University of Hawaii at Manoa, Department of Economics 199805, University of Hawaii at Manoa, Department of Economics.
  12. William D. Nordhaus & James Tobin, 1972. "Economic Research: Retrospect and Prospect Vol 5: Economic Growth," NBER Books, National Bureau of Economic Research, Inc, number nord72-1.
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Cited by:
  1. Román David Zárate, 2013. "Family size and children quality: New evidence and new exogenous shocks in the case of Colombian Households," DOCUMENTOS CEDE 010588, UNIVERSIDAD DE LOS ANDES-CEDE.
  2. Wilde, Joshua, 2012. "How substitutable are fixed factors in production? evidence from pre-industrial England," MPRA Paper 39278, University Library of Munich, Germany.

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