ENDOGENOUS FERTILITY WITH A SIBSHIP SIZE EFFECT. (16th October 2015)

• Record Type: Journal Article
• Authors: Brezis, Elise S.; Ferreira, Rodolphe Dos Santos
• Editors: Azomahou, Théophile T.; Boucekkine, Raouf; Mohnen, Pierre; Verspagen, Bart
• Is Part Of: Macroeconomic dynamics. Volume 20:Number 8(2016)
• Page Start: 2046
• Page End: 2066
• Publication Date: 2015-10-16
• Subjects: Endogenous Fertility, -- Intergenerational Transfers, -- Human Capital Formation, -- Demographic Transition; Macroeconomics -- Periodicals; 339.05
• DOI: 10.1017/S1365100515000255
• Languages: English
• ISSNs: 1365-1005

Abstract

Abstract : Since the seminal work of Becker, the dynamics of endogenous fertility has been based on the trade-off faced by parents between the quantity and the quality of their children. However, in developing countries, where child labor is an indispensable source of household income, parents actually incur a negative cost by having an extra child, so that the trade-off disappears. The purpose of this paper is to restore the Beckerian quantity–quality trade-off when intergenerational transfers are upstream, in order to keep fertility endogenous. We do that by adding a negative "sibship size effect" on human capital formation to the standard Becker model. With a simple specification, we obtain multiplicity of steady states or, more fundamentally, the possibility of a jump from a state with high fertility and low income to a state with low fertility and high income, triggered by a continuous increase in the productivity of human capital formation.