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Variety expansion and fertility rates

Author

Listed:
  • Akiko Maruyama

    () (Population Research Institute, Nihon University)

  • Kazuhiro Yamamoto

    () (Graduate School of Economics, Osaka University)

Abstract

To investigate how fertility rates interrelate with the modern economy, we construct a simple model in which variety expansion of consumption goods reduces fertility rates. In our model, variety expansion reduces the relative price of a composite of differentiated goods compared to child- rearing costs. Thus, parents raise the expenditure share for differentiated goods and lower the number of children. We show that this model can be applied to a growth model in which economic growth progresses with variety expansion of consumption goods and fertility rates decrease with economic growth. In addition, we show that international trade, which raises consumption variety, lowers fertility rates. Thus, we show a new mechanism for fertility decline, and this mechanism can be applied to growth and international trade models.

Suggested Citation

  • Akiko Maruyama & Kazuhiro Yamamoto, 2007. "Variety expansion and fertility rates," Discussion Papers in Economics and Business 07-29-Rev.2, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP), revised Jun 2008.
  • Handle: RePEc:osk:wpaper:0729r2
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    References listed on IDEAS

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    1. 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.
    2. Kalemli-Ozcan, Sebnem, 2002. "Does the Mortality Decline Promote Economic Growth?," Journal of Economic Growth, Springer, vol. 7(4), pages 411-439, December.
    3. Oded Galor & Andrew Mountford, 2006. "Trade and the Great Divergence: The Family Connection," American Economic Review, American Economic Association, vol. 96(2), pages 299-303, May.
    4. Galor, Oded & Weil, David, 1998. "Population, Technology and Growth: From the Malthusian Regime to the Demographic Transition," CEPR Discussion Papers 1981, C.E.P.R. Discussion Papers.
    5. Galor, Oded, 2005. "From Stagnation to Growth: Unified Growth Theory," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 4, pages 171-293 Elsevier.
    6. Oded Galor, 2006. "The Demographic Transition," Working Papers 2006-24, Brown University, Department of Economics.
    7. Galor, Oded & Weil, David N, 1996. "The Gender Gap, Fertility, and Growth," American Economic Review, American Economic Association, vol. 86(3), pages 374-387, June.
    8. Sato, Yasuhiro & Yamamoto, Kazuhiro, 2005. "Population concentration, urbanization, and demographic transition," Journal of Urban Economics, Elsevier, vol. 58(1), pages 45-61, July.
    9. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    10. 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.
    11. Kalemli-Ozcan, Sebnem & Ryder, Harl E. & Weil, David N., 2000. "Mortality decline, human capital investment, and economic growth," Journal of Development Economics, Elsevier, vol. 62(1), pages 1-23, June.
    12. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    13. Tamura, Robert, 2002. "Human capital and the switch from agriculture to industry," Journal of Economic Dynamics and Control, Elsevier, vol. 27(2), pages 207-242, December.
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    16. repec:rus:hseeco:122439 is not listed on IDEAS
    17. 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.
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    Cited by:

    1. repec:bla:rgscpp:v:8:y:2016:i:4:p:177-195 is not listed on IDEAS
    2. Hiroshi Goto & Keiya Minamimura, 2015. "Geography and Demography: New Economic Geography with Endogenous Fertility," Discussion Paper Series DP2015-33, Research Institute for Economics & Business Administration, Kobe University.
    3. Hiroaki Ohno & Kouki Sugawara, 2016. "Variety expansion, preference shocks, and financial intermediaries," Annals of Finance, Springer, vol. 12(1), pages 17-28, February.
    4. Tadashi Morita & Kazuhiro Yamamoto, 2013. "Economic geography, endogenous fertility, and agglomeration," Discussion Papers in Economics and Business 13-23, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    5. Hiroshi Goto & Keiya Minamimura, 2014. "Fertility, Regional Demographics, and Economic Integration," Discussion Papers 1405, Graduate School of Economics, Kobe University.
    6. Koichi Futagami & Kunihiko Konishi, 2017. "Rising Longevity, Fertility Dynamics, and R&D-based Growth," Discussion Papers in Economics and Business 17-26, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    7. Koji Kitaura & Akira Yakita, 2010. "School Education, Learning-by-Doing, and Fertility in Economic Development," Review of Development Economics, Wiley Blackwell, vol. 14(4), pages 736-749, November.

    More about this item

    Keywords

    Consumerism; Fertility rates; Variety expansion; Economic growth; International trade;

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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