IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/13680.html
   My bibliography  Save this paper

Complements versus Substitutes and Trends in Fertility Choice in Dynastic Models

Author

Listed:
  • Larry E. Jones
  • Alice Schoonbroodt

Abstract

The Barro-Becker model is a simple intuitive model of fertility choice. In its original formulation, however, it has not been very successful at reproducing the changes in fertility choice in response to decreased mortality and increased income growth that demographers have emphasized in explaining the demographic transition. In this paper we show that this is due to an implicit assumption that number and utility of children are complements, which is a byproduct of the high intertemporal elasticity of substitution (IES) typically assumed in the fertility literature. We show that, not only is this assumption not necessary, but both the qualitative and quantitative properties of the model in terms of fertility choice change dramatically when substitutability and high curvature are assumed. To do so, we first derive analytical comparative statics and perform quantitative experiments. We find that if IES is less than one, model predictions of changes in fertility amount to about two-thirds of those observed in U.S. data since 1800. There are two major sources to these predicted changes, the increase in the growth rate of productivity which accounts for about 90 percent of the predicted fall in fertility before 1880, and changes in mortality which account for 90 percent of the predicted change from 1880 to 1950.

Suggested Citation

  • Larry E. Jones & Alice Schoonbroodt, 2007. "Complements versus Substitutes and Trends in Fertility Choice in Dynastic Models," NBER Working Papers 13680, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:13680
    Note: CH EFG HE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w13680.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Oded Galor & Omer Moav, 2002. "Natural Selection and the Origin of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 117(4), pages 1133-1191.
    2. Larry E. Jones & Michele Tertilt, 2006. "An Economic History of Fertility in the U.S.: 1826-1960," NBER Working Papers 12796, National Bureau of Economic Research, Inc.
    3. David De La Croix & Matthias Doepke, 2009. "To Segregate or to Integrate: Education Politics and Democracy," Review of Economic Studies, Oxford University Press, vol. 76(2), pages 597-628.
    4. Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters,in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 323-350 National Bureau of Economic Research, Inc.
    5. David de la Croix & Omar Licandro, 2013. "The Child is Father Of the Man: Implications for the Demographic Transition," Economic Journal, Royal Economic Society, vol. 123(567), pages 236-261, March.
    6. Oded Galor, 2005. "The Demographic Transition and the Emergence of Sustained Economic Growth," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 494-504, 04/05.
    7. Matthias Doepke, 2004. "Accounting for Fertility Decline During the Transition to Growth," Journal of Economic Growth, Springer, vol. 9(3), pages 347-383, September.
    8. Kalemli-Ozcan, Sebnem, 2002. "Does the Mortality Decline Promote Economic Growth?," Journal of Economic Growth, Springer, vol. 7(4), pages 411-439, December.
    9. Sah, Raaj Kumar, 1991. "The Effects of Child Mortality Changes on Fertility Choice and Parental Welfare," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 582-606, June.
    10. Zvi Eckstein & Pedro Mira & Kenneth I. Wolpin, 1999. "A Quantitative Analysis of Swedish Fertility Dynamics: 1751-1990," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(1), pages 137-165, January.
    11. Rosenzweig, Mark R, 1990. "Population Growth and Human Capital Investments: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 38-70, October.
    12. Michele BOLDRIN & Mariacristina DE NARDI & Larry E. JONES, 2015. "Fertility and Social Security," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 81(3), pages 261-299, September.
    13. repec:fth:sotoec:0031 is not listed on IDEAS
    14. Julio Cáceres-Delpiano, 2006. "The Impacts of Family Size on Investment in Child Quality," Journal of Human Resources, University of Wisconsin Press, vol. 41(4).
    15. Xavier Mateos-Planas, 2002. "The Demographic Transition in Europe: A Neoclassical Dynastic Approach," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(3), pages 646-680, July.
    16. Joshua D. Angrist & Victor Lavy & Analia Schlosser, 2005. "New Evidence on the Causal Link Between the Quantity and Quality of Children," NBER Working Papers 11835, National Bureau of Economic Research, Inc.
    17. 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.
    18. Laurence Ales & Maziero Pricila, "undated". "Accounting for Private Information," GSIA Working Papers 2010-E58, Carnegie Mellon University, Tepper School of Business.
    19. Jeremy Greenwood & Guillaume Vandenbroucke, 2005. "Hours Worked (Long-Run Trends)," Economie d'Avant Garde Research Reports 10, Economie d'Avant Garde.
    20. Matthias Doepke & Michèle Tertilt, 2009. "Women's Liberation: What's in It for Men?," The Quarterly Journal of Economics, Oxford University Press, vol. 124(4), pages 1541-1591.
    21. Kalemli-Ozcan, Sebnem, 2003. "A stochastic model of mortality, fertility, and human capital investment," Journal of Development Economics, Elsevier, vol. 70(1), pages 103-118, February.
    22. Ben-Porath, Yoram, 1976. "Fertility Response to Child Mortality: Micro Data from Israel," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 163-178, August.
    23. Geib-Gundersen, Lisa & Zahrt, Elizabeth, 1996. "A New Look at U.S. Agricultural Productivity Growth, 1800–1910," The Journal of Economic History, Cambridge University Press, vol. 56(03), pages 679-686, September.
    24. Jeremy Greenwood & Ananth Seshadri, 2002. "The U.S. Demographic Transition," American Economic Review, American Economic Association, vol. 92(2), pages 153-159, May.
    25. Chulhee Lee, 2001. "The expected length of male retirement in the United States, 1850-1990," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(4), pages 641-650.
    26. 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.
    27. Fernando Alvarez, 1999. "Social Mobility: The Barro-Becker Children Meet the Laitner-Loury Dynasties," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(1), pages 65-103, January.
    28. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
    29. Robert William Fogel, 1990. "The Conquest of High Mortality and Hunger in Europe and America: Timing and Mechanisms," NBER Historical Working Papers 0016, National Bureau of Economic Research, Inc.
    30. Michael R. Haines, 1994. "Estimated Life Tables for the United States, 1850-1900," NBER Historical Working Papers 0059, National Bureau of Economic Research, Inc.
    31. Michael Bar & Oksana Leukhina, 2010. "Demographic Transition and Industrial Revolution: A Macroeconomic Investigation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(2), pages 424-451, April.
    32. Alessandro Cigno, 1998. "Fertility decisions when infant survival is endogenous," Journal of Population Economics, Springer;European Society for Population Economics, vol. 11(1), pages 21-28.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

    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:nbr:nberwo:13680. 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: (). General contact details of provider: http://edirc.repec.org/data/nberrus.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.