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Children and the Wealth of Nations

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  • Juan Cordoba

    (Iowa State University)

Abstract

The welfare of an individual depends on the quality and quantity of life. The quantity of life itself depends on longevity but also on the number of descendants. Specifically, children, grandchildren, etc, offer an alternative way to extend life for altruistic parents. Everything else equal, a lower fertility rate reduces the welfare of altruistic parents. This paper incorporates fertility into an overall assessment of the degree and evolution of cross-country inequality around the world and shows that it is quantitatively important. Our calculations suggest a major quantity-quantity trade-off: for the period 1970-2005, the overall welfare gains due to longevity improvements were mostly offset by the welfare loss due fertility reductions. The effective quantity of life remained roughly constant.

Suggested Citation

  • Juan Cordoba, 2012. "Children and the Wealth of Nations," 2012 Meeting Papers 1052, Society for Economic Dynamics.
  • Handle: RePEc:red:sed012:1052
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    References listed on IDEAS

    as
    1. Eve Chiapello & A. Hurand, 2011. "Contribution," Post-Print hal-00681170, HAL.
    2. Gary S. Becker & Tomas J. Philipson & Rodrigo R. Soares, 2005. "The Quantity and Quality of Life and the Evolution of World Inequality," American Economic Review, American Economic Association, pages 277-291.
    3. Cordoba, Juan Carlos & Ripoll, Marla, 2012. "Life, Death and World Inequality," Staff General Research Papers Archive 34945, Iowa State University, Department of Economics.
    4. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    5. Viscusi, W Kip, 1993. "The Value of Risks to Life and Health," Journal of Economic Literature, American Economic Association, pages 1912-1946.
    6. 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.
    7. Córdoba, Juan Carlos & Verdier, Geneviève, 2008. "Inequality and growth: Some welfare calculations," Journal of Economic Dynamics and Control, Elsevier, vol. 32(6), pages 1812-1829, June.
    8. Marla Ripoll & Juan Carlos Cordoba, 2011. "A Contribution to the Economic Theory of Fertility," 2011 Meeting Papers 1207, Society for Economic Dynamics.
    9. Birchenall, Javier A. & Soares, Rodrigo R., 2009. "Altruism, fertility, and the value of children: Health policy evaluation and intergenerational welfare," Journal of Public Economics, Elsevier, pages 280-295.
    10. Gary S. Becker & Robert J. Barro, 1988. "A Reformulation of the Economic Theory of Fertility," The Quarterly Journal of Economics, Oxford University Press, pages 1-25.
    11. repec:reg:rpubli:282 is not listed on IDEAS
    12. Rodolfo E. Manuelli & Ananth Seshadri, 2009. "Explaining International Fertility Differences," The Quarterly Journal of Economics, Oxford University Press, vol. 124(2), pages 771-807.
    13. Gary S. Becker & Tomas J. Philipson & Rodrigo R. Soares, 2005. "The Quantity and Quality of Life and the Evolution of World Inequality," American Economic Review, American Economic Association, pages 277-291.
    14. Kevin M. Murphy & Robert H. Topel, 2006. "The Value of Health and Longevity," Journal of Political Economy, University of Chicago Press, vol. 114(5), pages 871-904, October.
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    More about this item

    JEL classification:

    • I - Health, Education, and Welfare
    • J - Labor and Demographic Economics
    • O - Economic Development, Innovation, Technological Change, and Growth

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