IDEAS home Printed from https://ideas.repec.org/p/isu/genres/34989.html
   My bibliography  Save this paper

Children and the Wealth of Nations

Author

Listed:
  • Cordoba, Juan Carlos

Abstract

This paper uses calibrated versions of the Barro-Becker model to compute measures of well-being for 142 countries between 1970 and 2005. In the model, individuals are altruistic toward their descendants: they enjoy the well-being of their children. We derive a model based measure of effective "quantity of life," the effective life span of an individual. It depends positively on life expectancy, degree of altruism and number of children, and negatively on the rate of time discounting. Our calculations suggest a major quantity-quantity trade-off: for the period 1970-2005 the gains in quantity of life due to longevity improvements were mostly offset or overcome by the losses due to fertility reductions. Depending on the precise calibration, the effective quantity of life either remained roughly constant or fell substantially around the world. For many countries the effective growth rate of well-being, one that takes into account the quantity and quality of life, is significantly below the growth rate of per-capita GDP. Our findings challenge the wide-spread belief that development through fertility reductions is a free lunch.

Suggested Citation

  • Cordoba, Juan Carlos, 2012. "Children and the Wealth of Nations," Staff General Research Papers Archive 34989, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:34989
    as

    Download full text from publisher

    File URL: http://www2.econ.iastate.edu/papers/p14989-2012-03-16.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Eve Chiapello & A. Hurand, 2011. "Contribution," Post-Print hal-00681170, HAL.
    2. Gary S. Becker & Tomas J. Philipson & Rodrigo R. Soares, 2005. "The Quantity and Quality of Life and the Evolution of World Inequality," American Economic Review, American Economic Association, vol. 95(1), pages 277-291, March.
    3. Viscusi, W Kip, 1993. "The Value of Risks to Life and Health," Journal of Economic Literature, American Economic Association, vol. 31(4), pages 1912-1946, December.
    4. Córdoba, Juan Carlos & Verdier, Geneviève, 2008. "Inequality and growth: Some welfare calculations," Journal of Economic Dynamics and Control, Elsevier, vol. 32(6), pages 1812-1829, June.
    5. Birchenall, Javier A. & Soares, Rodrigo R., 2009. "Altruism, fertility, and the value of children: Health policy evaluation and intergenerational welfare," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 280-295, February.
    6. Cordoba, Juan Carlos & Ripoll, Marla, 2011. "A Contribution to the Economic Theory of Fertility," Staff General Research Papers Archive 33899, Iowa State University, Department of Economics.
    7. Barro, Robert J & Becker, Gary S, 1989. "Fertility Choice in a Model of Economic Growth," Econometrica, Econometric Society, vol. 57(2), pages 481-501, March.
    8. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    9. Kevin M. Murphy & Robert H. Topel, 2006. "The Value of Health and Longevity," Journal of Political Economy, University of Chicago Press, vol. 114(5), pages 871-904, October.
    10. Cordoba, Juan Carlos & Ripoll, Marla, 2012. "Life, Death and World Inequality," Staff General Research Papers Archive 34945, Iowa State University, Department of Economics.
    11. 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.
    12. repec:reg:rpubli:282 is not listed on IDEAS
    13. Rodolfo E. Manuelli & Ananth Seshadri, 2009. "Explaining International Fertility Differences," The Quarterly Journal of Economics, Oxford University Press, vol. 124(2), pages 771-807.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • I - Health, Education, and Welfare
    • J - Labor and Demographic Economics
    • O - Economic Development, Innovation, Technological Change, and Growth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:isu:genres:34989. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Curtis Balmer). General contact details of provider: http://edirc.repec.org/data/deiasus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.