Poverty Trap and Endogenous Population
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 subsistence level per capita consumption. However, we also demonstrate that the economy can escape from this unappealing long run situation through a suitable technological shift or an appropriate child- rearing tax. For such an escape, the technological shift must be non-neutral in the sense that it modifies the ratio of factor's marginal productivity.
|Date of creation:||1999|
|Date of revision:|
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