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Optimal fertility along the life cycle

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  • Pierre Pestieau
  • Gregory Ponthiere

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Abstract

We explore the optimal fertility timing in a four-period OLG economy with physical capital, whose specificity is to include not one, but two reproduction periods. It is shown that, for a given total fertility rate, the economy exhibits quite different dynamics, depending on the timing of births. If all births take place in the late reproduction period, there exists no stable stationary equilibrium and the economy exhibits cyclical dynamics due to labor growth fluctuations. We characterize the long-run social optimum and show that optimal consumptions and capital depend on the optimal cohort growth factor, so that there is no one-to-one substitutability between early and late fertility. We also extend Samuelson’s Serendipity Theorem to our economy and study the robustness of our results to: (1) endogenizing fertility timing, (2) assuming rational anticipations about factor prices, (3) adding a third reproduction period. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Pierre Pestieau & Gregory Ponthiere, 2014. "Optimal fertility along the life cycle," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 55(1), pages 185-224, January.
  • Handle: RePEc:spr:joecth:v:55:y:2014:i:1:p:185-224
    DOI: 10.1007/s00199-013-0747-1
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Gregory Ponthiere, 2016. "Utilitarian population ethics and births timing," Journal of Economics, Springer, vol. 117(3), pages 189-238, April.
    2. Pierre Pestieau & Grégory Ponthière, 2015. "Long-term care and births timing," Working Papers halshs-01131236, HAL.
    3. Gregory Ponthiere, 2016. "The contribution of improved joint survival conditions to living standards: an equivalent consumption approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(2), pages 407-449, February.
    4. Klaus Prettner & David Canning, 2014. "Increasing life expectancy and optimal retirement in general equilibrium," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(1), pages 191-217, May.
    5. Pestieau, Pierre & Ponthiere, Gregory, 2016. "Long-term care and births timing," Journal of Health Economics, Elsevier, vol. 50(C), pages 340-357.
    6. Pierre Pestieau & Gregory Ponthiere, 2017. "Optimal fertility under age-dependent labour productivity," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(2), pages 621-646, April.
    7. Pierre Pestieau & Grégory Ponthière, 2012. "Optimal Lifecycle Fertility in a Barro Becker Economy," Working Papers halshs-00676500, HAL.
    8. Grégory Ponthière, 2015. "The contribution of improved joint survival conditions to living standards: An equivalent consumption approach," Working Papers halshs-01194427, HAL.
    9. Pierre Pestieau & Gregory Ponthiere, 2015. "Optimal life-cycle fertility in a Barro-Becker economy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(1), pages 45-87, January.
    10. Hippolyte D'Albis & Angela Greulich & Grégory Ponthière, 2017. "Development, fertility and childbearing age: A unified growth theory," PSE Working Papers halshs-01452846, HAL.
    11. Pierre Pestieau & Gregory Ponthiere, 2013. "Childbearing Age, Family Allowances, and Social Security," Southern Economic Journal, Southern Economic Association, vol. 80(2), pages 385-413, October.
    12. Grégory Ponthière, 2015. "Utilitarian population ethics and births timing," Working Papers halshs-01207185, HAL.
    13. Thomas I. Renström & Luca Spataro, 2015. "Population Growth and Human Capital: A Welfarist Approach," Manchester School, University of Manchester, vol. 83, pages 110-141, December.
    14. Pierre Pestieau & Grégory Ponthière, 2011. "Childbearing Age, Family Allowances and Social Security," Working Papers hal-00612613, HAL.

    More about this item

    Keywords

    Childbearing ages; Early and late motherhoods; Fertility; Overlapping generations; Social optimum; E13; E21; J13;

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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