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Mortality Differential, Labor Taxation And Growth: What Do We Learn From The Barro-Becker Model?

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  • Thomas Seegmuller

    () (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique - ECM - Ecole Centrale de Marseille)

  • Stefano Bosi

    () (THEMA - Théorie économique, modélisation et applications - Université de Cergy Pontoise - CNRS - Centre National de la Recherche Scientifique)

Abstract

We revisit the seminal paper on endogenous fertility by Barro and Becker (1989) taking into account households' heterogeneity in terms of capital endowments, mortality differential and cost per surviving child. Focusing on an endogenous growth version, we show at first that there exists a unique balanced growth path (BGP) where the population growth rates of all dynasties are identical. Then, we study the long-run effects of shocks on mortality rates (such as epidemics), mortality differential and total factor productivity (TFP) on the economic and demographic growth rates. The main mechanism rests on the adjustment of the average rearing cost of a surviving child. Finally, we extend the model considering the effects of labor taxation. We find that a higher tax rate may, on the one side, enhance growth but, on the other side, raise wealth inequalities.

Suggested Citation

  • Thomas Seegmuller & Stefano Bosi, 2010. "Mortality Differential, Labor Taxation And Growth: What Do We Learn From The Barro-Becker Model?," Working Papers halshs-00472732, HAL.
  • Handle: RePEc:hal:wpaper:halshs-00472732 Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00472732
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    References listed on IDEAS

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    1. Matthias Doepke, 2005. "Child mortality and fertility decline: Does the Barro-Becker model fit the facts?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(2), pages 337-366, June.
    2. David de la Croix & Matthias Doepke, 2003. "Inequality and Growth: Why Differential Fertility Matters," American Economic Review, American Economic Association, vol. 93(4), pages 1091-1113, September.
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    7. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    8. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
    9. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
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    11. Dahan, Momi & Tsiddon, Daniel, 1998. "Demographic Transition, Income Distribution, and Economic Growth," Journal of Economic Growth, Springer, vol. 3(1), pages 29-52, March.
    12. David Croix & Alessandro Sommacal, 2009. "A Theory of Medical Effectiveness, Differential Mortality, Income Inequality and Growth for Pre-Industrial England," Mathematical Population Studies, Taylor & Francis Journals, vol. 16(1), pages 2-35.
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    Keywords

    endogenous fertility; heterogeneous households; mortality differential; labor taxation; endogenous growth;

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