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Poverty Trap and Endogenous Population

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  • Hung, Nguyen Manh
  • Makdissi, Paul

Abstract

In this paper, we develop a growth model in which human being is a production factor which can be combined with a fixed factor, say land, to produce a homogeneous commodity. Saving, so to speak, can only be made through having children, the number of which is an endogenous decision to the household. In this context, we show that the economy may run into a poverty trap with a subsistent level per capita consumption. However, we also demonstrate that the economy can escape from this unappealing long run situation through a suitable technology transfer or an appropriate child-rearing tax. For such an escape, the technology transfer must be non-neutral in the sense that it modifies the ratio of factor's marginal productivity.

Suggested Citation

  • Hung, Nguyen Manh & Makdissi, Paul, 2001. "Poverty Trap and Endogenous Population," Cahiers de recherche 0104, Université Laval - Département d'économique.
    • Handle: RePEc:lvl:laeccr:0104
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    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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