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Fertility choices, Demographics and Automation

Author

Listed:
  • Derick Almeida

    (University of Coimbra, Faculty of Economics)

  • Tiago Neves Sequeira

    (University of Coimbra, Centre for Business and Economics and Faculty of Economics)

Abstract

In this paper we study a theoretical link between the effects of increased automation on labor markets, and the fertility decisions of a representative household that is replaced by robots in the production of tasks. We develop a framework in which children provide utility and impose an opportunity cost to the household due to lost labor income. We show that fertility rate changes are the result of an optimal response to wage variations after the economy is hit by a shock that increases the design quality of robots used in production. Using this model, we characterize an initial equilibrium and simulate the effect of a 10% increase in robot productivity on important endogenous variables, including wages, and find that, in the absence of fixed costs to raising children, the fertility rate increases by approximately 3.4%.

Suggested Citation

  • Derick Almeida & Tiago Neves Sequeira, 2023. "Fertility choices, Demographics and Automation," CeBER Working Papers 2023-05, Centre for Business and Economics Research (CeBER), University of Coimbra.
    • Handle: RePEc:gmf:papers:2023-05
    as

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    References listed on IDEAS

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    1. Gary S. Becker & H. Gregg Lewis, 1974. "Interaction between Quantity and Quality of Children," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 81-90, National Bureau of Economic Research, Inc.
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    4. Andy Feng & Georg Graetz, 2020. "Training Requirements, Automation, and Job Polarisation," The Economic Journal, Royal Economic Society, vol. 130(631), pages 2249-2271.
    5. Daron Acemoglu & Pascual Restrepo, 2022. "Demographics and Automation [Automation and Demographic Change]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(1), pages 1-44.
    6. Kristiina Huttunen & Jenni Kellokumpu, 2016. "The Effect of Job Displacement on Couples' Fertility Decisions," Journal of Labor Economics, University of Chicago Press, vol. 34(2), pages 403-442.
    7. Carl-Johan Dalgaard & Holger Strulik, 2014. "Optimal Aging And Death: Understanding The Preston Curve," Journal of the European Economic Association, European Economic Association, vol. 12(3), pages 672-701, June.
    8. Arnaud Costinot & Jonathan Vogel, 2010. "Matching and Inequality in the World Economy," Journal of Political Economy, University of Chicago Press, vol. 118(4), pages 747-786, August.
    9. Massimo Anelli & Osea Giuntella & Luca Stella, 2021. "Robots, Marriageable Men, Family, and Fertility," CESifo Working Paper Series 9378, CESifo.
    10. Daron Acemoglu & Pascual Restrepo, 2018. "The Race between Man and Machine: Implications of Technology for Growth, Factor Shares, and Employment," American Economic Review, American Economic Association, vol. 108(6), pages 1488-1542, June.
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    Cited by:

    1. Almeida, Derick & Naudé, Wim & Sequeira, Tiago Neves, 2024. "Artificial Intelligence and the Discovery of New Ideas: Is an Economic Growth Explosion Imminent?," IZA Discussion Papers 16766, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Automation; Robots; Tasks; Fertility;
    All these keywords.

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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