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Urbanization, Old-Age Security, Saving and Fertility in Developing Economies

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  • Joel M. Guttman

Abstract

This paper develops a two-sector overlapping generations (OLG) model of the co-evolution of urbanization, saving, and fertility in developing economies. Children are viewed as a means of old-age support, particularly in the rural sector, as well as a good valued for its own sake. It is shown that, under plausible parameter assumptions, a very mild rate of technological change is sufficient to yield large increases in the saving rate and in the level of urbanization, and large decreases in the fertility rate over time, which accords well with the experience of the Asian Tigers.

Suggested Citation

  • Joel M. Guttman, 2010. "Urbanization, Old-Age Security, Saving and Fertility in Developing Economies," NFI Working Papers 2010-WP-07, Indiana State University, Scott College of Business, Networks Financial Institute.
    • Handle: RePEc:nfi:nfiwps:2010-wp-07
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    References listed on IDEAS

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    More about this item

    Keywords

    Old-age security hypothesis; two-sector growth models; urbanization; endogenous fertility;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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