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Employment and Fertility Choice: A Differential Game Approach

Author

Listed:
  • Le Wang

    (University of Minnesota)

  • Joao Ricardo Faria

    (University of Texas Pan American)

Abstract

For OECD countries there is an intriguing variety of combinations between total fertility rate (TFR) and female labor force participation rate (FPR) suggesting the existence of multiple equilibria. This paper provides a differential game framework where the employment choices by husband and wife affect a family's fertility. The model has multiple open-loop equilibria characterized by different combinations of FPR and TFR that are consistent with the empirical cross-country evidence. The dynamic trajectory from one equilibrium point to another also sheds lights on possible demographic transition of individual countries as displayed in their time series data. The model stresses that the husband's employment decisions are as important as wife's in determining family size.

Suggested Citation

  • Le Wang & Joao Ricardo Faria, 2007. "Employment and Fertility Choice: A Differential Game Approach," Economics Bulletin, AccessEcon, vol. 10(9), pages 1-8.
  • Handle: RePEc:ebl:ecbull:eb-07j00004
    as

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    References listed on IDEAS

    as
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    4. Pedro Mira & Namkee Ahn, 2002. "A note on the changing relationship between fertility and female employment rates in developed countries," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(4), pages 667-682.
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    6. Bettio, Francesca & Villa, Paola, 1998. "A Mediterranean Perspective on the Breakdown of the Relationship between Participation and Fertility," Cambridge Journal of Economics, Oxford University Press, vol. 22(2), pages 137-171, March.
    7. Feichtinger, Gustav & Wirl, Franz, 1993. "A Dynamic Variant of the Battle of the Sexes," International Journal of Game Theory, Springer;Game Theory Society, vol. 22(4), pages 359-380.
    8. Daniela Del Boca, 2002. "The effect of child care and part time opportunities on participation and fertility decisions in Italy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(3), pages 549-573.
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    More about this item

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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