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Population growth overshooting and trade in developing countries

  • Ulla Lehmijoki

    ()

  • Tapio Palokangas

    ()

This paper examines a developing economy by a family-optimization model in which the number of children is a normal good in preferences. Trade liberalization generates two effects: an income effect, which raises population growth in the short run; and a gender wage effect, which decreases that in the long run. With higher income, families invest more in capital. Because female labor is more complementary to capital, a higher level of investment increases women's relative wages and attracts more of them from child rearing into production. Consequently, the population growth rate falls below the original level in the long run. This paper also provides some empirical evidence on these results.

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File URL: http://hdl.handle.net/10.1007/s00148-007-0144-9
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Article provided by Springer & European Society for Population Economics in its journal Journal of Population Economics.

Volume (Year): 22 (2009)
Issue (Month): 1 (January)
Pages: 43-56

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Handle: RePEc:spr:jopoec:v:22:y:2009:i:1:p:43-56
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  1. Galor, Oded & Mountford, Andrew, 2006. "Trade and the Great Divergence: The Family Connection," CEPR Discussion Papers 5490, C.E.P.R. Discussion Papers.
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  14. Gary S. Becker & Robert J. Barro, 1988. "A Reformulation of the Economic Theory of Fertility," The Quarterly Journal of Economics, Oxford University Press, vol. 103(1), pages 1-25.
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