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A Stochastic Model of Mortality, Fertility, and Human Capital Investment

  • Sebnem Kalemli-Ozcan

    (The University of Houston)

This paper examines the relationship between fertility and human capital investment, and it’s implications for economic growth, focusing on the e ects of declining mortality. Unlike the existing literature, this paper stresses the role of uncertainty about the number of surviving children. If the marginal utility of a surviving child is convex then there will be a precautionary demand for children. As the mortality rate and thus uncertainty falls, this demand decreases. Furthermore, lower mortality encourages educational investment in children. The key result is that this empirically observed quality-quantity trade o is realized only if uncertainty is incorporated into individual’s optimization problem.

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File URL: http://128.118.178.162/eps/mac/papers/0212/0212009.pdf
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Paper provided by EconWPA in its series Macroeconomics with number 0212009.

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Date of creation: 17 Dec 2002
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Handle: RePEc:wpa:wuwpma:0212009
Note: Type of Document - Tex; prepared on IBM PC ; to print on HP;
Contact details of provider: Web page: http://128.118.178.162

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  1. Dahan, Momi & Tsiddon, Daniel, 1998. " Demographic Transition, Income Distribution, and Economic Growth," Journal of Economic Growth, Springer, vol. 3(1), pages 29-52, March.
  2. Becker, Gary S & Murphy, Kevin M & Tamura, Robert, 1990. "Human Capital, Fertility, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S12-37, October.
  3. Francine D. Blau, 1996. "The Gender Pay Gap," NBER Working Papers 5664, National Bureau of Economic Research, Inc.
  4. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, June.
  5. 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.
  6. David N. Weil & Oded Galor, 1999. "From Malthusian Stagnation to Modern Growth," American Economic Review, American Economic Association, vol. 89(2), pages 150-154, May.
  7. Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January.
  8. 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.
  9. 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 S163-78, August.
  10. Oded Galor & David N. Weil, 1993. "The Gender Gap, Fertility, and Growth," NBER Working Papers 4550, National Bureau of Economic Research, Inc.
  11. 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.
  12. Becker, Gary S, 1981. "Altruism in the Family and Selfishness in the Market Place," Economica, London School of Economics and Political Science, vol. 48(189), pages 1-15, February.
  13. Tamura, Robert, 2006. "Human capital and economic development," Journal of Development Economics, Elsevier, vol. 79(1), pages 26-72, February.
  14. Charles I. Jones, 1999. "Was an Industrial Revolution Inevitable? Economic Growth Over the Very Long Run," NBER Working Papers 7375, National Bureau of Economic Research, Inc.
  15. Brezis, Elise S., 2001. "Social classes, demographic transition and economic growth," European Economic Review, Elsevier, vol. 45(4-6), pages 707-717, May.
  16. Simon Appleton & Francis Teal, 2002. "Working Paper 39 - Human Capital and Economic Development," Working Paper Series 173, African Development Bank.
  17. O'Hara, Donald J, 1975. "Microeconomic Aspects of the Demographic Transition," Journal of Political Economy, University of Chicago Press, vol. 83(6), pages 1203-16, December.
  18. Gary S. Becker & Robert J. Barro, 1986. "A Reformulation of the Economic Theory of Fertility," NBER Working Papers 1793, National Bureau of Economic Research, Inc.
  19. Ram, Rati & Schultz, Theodore W, 1979. "Life Span, Health, Savings, and Productivity," Economic Development and Cultural Change, University of Chicago Press, vol. 27(3), pages 399-421, April.
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