Capital accumulation and the sources of demographic change

We develop a neoclassical growth model having a realistic demographic structure. We identify the critical channel of impact to be the intertemporal consumption allocation decision through the “generational turnover term”. Expressing the aggregate dynamics as a generalization of the conventional neoclassical growth model provides important insights, enabling us to view in a unified way how alternative demographic structures impinge on the macrodynamic equilibrium. Using an approximation to the generational turnover term, we are able to characterize both the steady state and the local transitional dynamics. Through numerical simulations, we analyze the steady state as well as the transitional effects of structural and demographic changes.     

Neoclassical growth with endogenous age distribution. Poverty vs low-fertility traps as steady states of demographic transitions

Compared to other factors, the role of the age distribution of the population as a key endogenous determinant of economic growth trajectories has traditionally been overlooked. This is unrealistic, especially when dealing with major epochs of structural change, such as demographic transitions. We set up a model combining a simple representation of the economy, based on the neoclassical growth model of Solow, with a comprehensive representation of population dynamics. The model is used to investigate the structure of balanced growth states of the population and the economy in the presence of demographic transitions. The analysis shows that proper inclusion of age structure enriches the spectrum of the long-run equilibria of the neoclassical model, allowing up to five states of balanced growth, and shows the onset of “poverty” and “low-fertility” traps as different facets of fertility transitions. The role of different timing of fertility, mortality and savings transitions, and of more realistic demography of capital, is also considered.     

Structural Change in Life Cycle Fertility During the Fertility Transition: France Before and After the Revolution of 1789

This paper explores the hypothesis that the fertility transition in France entailed a structural change in behaviour from natural to controlled fertility. We define the hypothesis in terms of an empirically estimable model of lifetime fertility. The model produces separate estimates of the three main proximate determinants: the hazard rate of conception for ovulating women, the timing of ovulation resumption after a birth, and permanent sterility. Fertility control is defined as responsiveness of the conception hazard to number of surviving children. We demonstrate key features of the model by simulated family histories. The historical application provides support for the transition hypothesis in the south of France, and mixed results for the north. We also find strong evidence of persistent couple-specific heterogeneity even after controlling for unobserved heterogeneity in fecundability. We suggest how future research might improve the model.     

Endogenous fertility and human capital in a Schumpeterian growth model

This study develops a scale-invariant Schumpeterian growth model with endogenous fertility and human capital accumulation. The model features two engines of long-run economic growth: R&D-based innovation and human capital accumulation. One novelty of this study is endogenous fertility, which negatively affects the growth rate of human capital. Given this growth-theoretic framework, we characterize the dynamics of the model and derive comparative statics of the equilibrium growth rates with respect to structural parameters. As for policy implications, we analyze how patent policy affects economic growth through technological progress, human capital accumulation, and endogenous fertility. In summary, we find that strengthening patent protection has (a) a positive effect on technological progress, (b) a negative effect on human capital accumulation through a higher rate of fertility, and (c) an ambiguous overall effect on economic growth.     

Peers and Fertility Preferences: An Empirical Investigation of the Role of Neighbours,Religion and Education

Individual fertility preference is influenced by observed social norms. The present paper investigates the effect of the observed fertility of peers on a woman’s fertility preference. We explore the role of two peer groups: neighbourhood peers and religious peers. Data from the National Family Health Surveys (1992–1993, 1998–1999 and 2005–2006) in India is employed for empirical estimations using a multinomial logit model. We find that both neighbourhood and religious peers have a significant impact on individual fertility preferences, but their relative importance changes with family size. An increase in peer fertility increases the probability of preferring more children. We further examine the roles of education and wealth as transmission channels between the fertility norms of peers to the fertility preferences of the women and find that education plays an important role in moderating peer influences. These findings can serve as vital inputs in formulating family planning and gender policies.     

Endogenous fertility,endogenous lifetime and economic growth: the role of child policies

We examine the effects of child policies on both transitional dynamics and long-term demo-economic outcomes in an overlapping-generations neoclassical growth model à la Chakraborty (J Econ Theory 116(1):119–137, 2004) extended with endogenous fertility under the assumption of weak altruism towards children. The government invests in public health, and an individual’s survival probability at the end of youth depends on health expenditure. We show that multiple development regimes can exist. However, poverty or prosperity does not necessarily depend on the initial conditions, since they are the result of how a child policy is designed. A child tax, for example, can be used effectively to enable those economies that were entrapped in poverty to prosper. There is also a long-term welfare-maximising level of the child tax. We show that a child tax can be used to increase capital accumulation, escape from poverty and maximise long-term welfare also when (a) a public pay-as-you-go pension system is in place and (b) the government issues an amount of public debt. Interestingly, there also exists a couple child tax–health tax that can be used to find the second-best optimum optimorum. In addition, we show that results are robust to the inclusion of decisions regarding the child quantity–quality trade-off under the assumption of impure altruism. In particular, there exists a threshold value of the child tax below (resp. above) which child quality spending is unaffordable (resp. affordable) and different scenarios are in existence.     

A simple endogenous growth model with endogenous fertility: indeterminacy and uniqueness

This paper studies the equilibrium dynamics and indeterminacy of equilibria in an endogenous growth model with endogenous fertility choice. We characterize the conditions that give rise to an unique equilibrium as well as multiple equilibria. Whenever there exists a unique equilibrium, it will be globally determinate; when multiple equilibria arise, indeterminacy occurs. In particular, we find that two equilibria occur – one is associated with high fertility and low growth, while the other is associated with low fertility and high growth. A parameterized example is given to assess the empirical feasibility of our results. The validity of the neo-Malthusian relation between fertility and growth is then re-examined. Finally, we study the relation between growth and welfare and compare different balanced growth equilibria in terms of their lifetime-attained utility. JEL classifications: O41, J13 Received December 11, 1995 / Accepted October 20, 1996     

The third birth in Sweden

This paper considers the formulation, estimation and interpretation of microdynamic models of fertility. Our model explains parity choices, sterility, childlessness, interbirth intervals and initiation of pregnancy within a unified framework. We develop a general methodology for estimating the determinants of transition times to births of different orders. Our procedure incorporates time-varying explanatory variables and unobservables. We present conditions that justify conventional formulae relating hazards to survivor functions when time-varying variables enter hazards. We also consider the validity of widely-used piecemeal estimation strategies that focus on one birth at a time. We consider methods for selecting a best model among a class of non-nested models. Two criteria are set forth and used to evaluate the detminants of third births in Sweden.We find that two models fit Swedish microdata equally well. One model is consistent with neoclassical economic theory. It assigns a central role to the wages of men and women in explaining the timing and spacing of births. The other model is purely demographic and excludes wages. Purely statistical criteria cannot distinguish these models although in other work we show that the economic models are more parsimonious in terms of the number of parameters that must be estimated and are better able to forecast aggregate time series.We demonstrate how to interpret the output of multistate fertility models. Wage effects on third births are decomposed into two components: (a) an in direct effect that determines whether a woman is at risk to have a third birth, and (b) a direct effect on the transition rate to the third birth given that a woman has had two births. We find that female wages play an important role in postponing first births but play only a minor role in explaining childlessness. Female wages substantially affect third births. Male wage effects are weaker. We find that female wage effects weaken for more recent cohorts of women. This evidence is consistent with the introduction of progressively more pronatal Swedish policies.This research was supported by NIH Grant No. HD-19226 to NORC. We have benefited from the comments of Elja Arjas and Ricardo Barros. This paper was presented at an IUSSP Conference in Paris, France, in March 1988, and as an invited lecture at the Fourth ESPE Meetings in Istanbul, Turkey, June, 1990. This paper is one part of a trilogy. Heckman and Walker (1990a) presents a succinct summary of the main economic results. Heckman and Walker (1990b) presents a more complete discussion of the empirical results. This paper presents a more purely demographic discussion.     

Relative income and fertility

The present study examines the relationship between relative income (i.e., actual income in relation to the expected income of one’s socioeconomic group) and fertility, using data collected by the 1967-1968Canadian Family Growth Study (Balakrishnan et al., 1975). We broaden the tests of relative income beyond cumulative fertility to spacing behavior and then examine some of the assumptions included in the relative income model of fertility. Results of the tests, in brief, are as follows: (a) Relative income is found to be more closely related to spacing than to cumulative fertility; and (b) the relationship between relative income and fertility is strongest among those couples who plan their life ahead and have a high level of education and occupation, and when temporal alignment is brought between the measures of relative income and fertility. For the relative income model to receive confirmation, it was specified that the following hypotheses must be confirmed: (a) that fertility behavior would vary positively with relative income but the fertility norm would show no relationship with relative income; and (b) that consumption norms and behavior would show no relationship with relative income. The outcome of these tests are in the expected direction, giving support to the relative income model. In addition, there is some evidence of predictive capability of the relative income model for correlative behavior.     

Bargaining over family size: The determinants of fertility in Brazil

Understanding how households make fertility decisions is important to implementing effective policy to slow population growth. Most empirical studies of this decision are based on household models in which men and women are assumed to act as if they have the same preferences for the number of children. However, if men and women have different preferences regarding fertility and are more likely to assert their own preferences as their bargaining power in the household increases, policies to lower fertility rates may be more effectively targeted toward one spouse or the other. In this paper, we test the relevance of the single preferences model by investigating whether men and women's nonwage incomes have the same effects on the number of children in the household. We find that while increases in both the man and woman's nonwage income lower the number of children in the household, an equivalent increase in the woman's income has a significantly stronger effect than the man's. In addition, we find that increases in women's nonwage transfer income have the strongest effects on the fertility decisions of women with low levels of education. The most important policy implication of our results is that policies aimed at increasing the incomes of the least-educated women will be the most effective in lowering fertility rates.     

Socioeconomic Differences in Multipartner Fertility Among Norwegian Men

This article analyzes male fertility, with a particular focus on multipartner fertility, for cohorts born 1955 to 1984 in Norway. We find that socioeconomically disadvantaged men have the lowest chance of becoming fathers and the lowest likelihood of fathering multiple children in stable unions. Multipartner fertility, on the other hand, is positively associated with both disadvantage and advantage: higher-order birth risks with a new partner are more prevalent among men with low as well as high socioeconomic status. An intervening factor among disadvantaged men may be a higher union dissolution risk, and an elevated risk among advantaged men may be associated with their higher preferences for children and other features that make these men more attractive to women as partners and fathers of future children.     

A socioeconomic analysis of the determinants of fertility: the case of Vietnam

This paper is an economics-based quantitative analysis of the determinants of individual fertility in Vietnam, measured as the number of children ever born. In addition to the conventional linear model, two limited dependent variable models, Poisson and ordered-logit, are estimated using data from the 1988 Vietnam Demographic and Health Survery. We find, among other things, that husbands‘ characteristics are almost as important as those of wives in determining fertility, perhaps a reflection of the still dominant role of husbands in Vietnamese families. Both paternal and maternal education have important impacts on fertility. Of special interest is the evidence that supports the attitudinal effect of education over the opportunity-cost effect. Received April 22, 1996 / Accepted January 13, 1997     

Family allowances in France

We model the impact of past migration on fertility, assessing the separate effects of relative urbanization of the destination, as a proxy for norms, and post-migration employment, as a proxy for opportunity costs. In the Philippines, we find that large fertility declines accompany post-migration employment. If not followed by work for pay, the estimated fertility impact of migration is small. We find little evidence of migrant selectivity in fertility, and offer speculative evidence that fertility disruption accompanying migration may be large enough to account for much of the apparent effect of normative adaptation.     

Why does migration decrease fertility? Evidence from the Philippines

We model the impact of past migration on fertility, assessing the separate effects of relative urbanization of the destination, as a proxy for norms, and post-migration employment, as a proxy for opportunity costs. In the Philippines, we find that large fertility declines accompany post-migration employment. If not followed by work for pay, the estimated fertility impact of migration is small. We find little evidence of migrant selectivity in fertility, and offer speculative evidence that fertility disruption accompanying migration may be large enough to account for much of the apparent effect of normative adaptation.     

Race,Remarital Status,and Infertility in 1910: More Evidence of Multiple Causes

The dominant approach to studying historical race-related fertility differences has been to limit samples to first-married and younger women. We argue that studying historical race-related fertility differences in the context of remarriage is also important: remarriage and fertility patterns are both rooted in the biosocial conditions that produce racial disparities in health. We employ a multiple causes framework that attributes variation in fertility patterns to voluntary limitation and involuntary factors (infecundity/subfecundity). We use data from the 1910 Integrated Public Use Microdata Series and estimate zero-inflated negative binomial models that simultaneously distinguish those who are infecund (vs. fecund) and estimate the number of remarital births among the fecund. Our approach allows us to evaluate historical remarital (in)fertility differences, accounting for marital, socioeconomic, and geographic influences on fecundity and fertility, while empirically accounting for the influence of children “missing” from the household due to mortality and fostering/aging out. Consistent with past studies that emphasized poorer African American health as a major influence on involuntary infertility, we find that African American women were more likely than white women to be in the always-zero (infecund) group and to have fewer remarital births. Supplemental analyses nuance these findings but indicate that these results are robust. Overall, we find support for a multiple-causes perspective: while the findings are consistent with the adoption of deliberate fertility control among urban and higher-status women at higher parities, remarital fertility differences in 1910 also reflected greater infecundity/subfecundity among subgroups of women, especially African American women.     

New Cohort Fertility Forecasts for the Developed World: Rises,Falls, and Reversals

With period fertility having risen in many low‐fertility countries, an important emerging question is whether cohort fertility trends are also reversing. We produce new estimates of cohort fertility for 37 developed countries using a new, simple method that avoids the underestimation typical of previous approaches. Consistent with the idea that timing changes were largely responsible for the last decades' low period fertility, we find that family size has remained considerably higher than the period rates of 1.5 in many “low‐fertility” countries, averaging about 1.8 children. Our forecasts suggest that the long‐term decline in cohort fertility is flattening or reversing in many world regions previously characterized by low fertility. We document the marked increase of cohort fertility in the English‐speaking world and in Scandinavia; signs of an upward reversal in many low‐fertility countries, including Japan and Germany; and continued declines in countries such as Taiwan and Portugal. We include in our forecasts estimates of statistical uncertainty and the possible effects of the recent economic recession.     

Assessing the Predictive Value of Fertility Expectations Through a Cognitive–Social Model

This paper grounds its analysis in a novel model (Bachrach and Morgan in Popul Dev Rev, 39:459–485, 2013) that suggests that responses to questions about fertility intentions may reflect distinct phenomena at distinct points in the life course. The model suggests that women form "true" intentions when their circumstances make the issue of childbearing salient and urgent enough to draw the cognitive resources needed to make a conscious plan; before this, women report intentions based on cognitive images of family and self. We test the implications of this model for reported fertility expectations using NLSY79 data that measure expectations throughout the life course. We find that early in the life course, before marriage and parenthood, women’s fertility expectations are associated with family background and cognitive images of family and future self. Later in the life course, as women experience life course transitions that confer statuses normatively associated with childbearing—such as marriage—and parenthood itself, their reported expectations are better predictors of their fertility than before they passed these life course milestones. Our empirical results provide support for a model which has important implications for both the measurement and conceptualization of women’s intended and expected fertility.     

The Relevance of the 'Easterlin hypothesis' and the 'new home economics' to fertility movements in Great Britain

Summary The hypothesis that a family's economic status relative to its aspirations (relative economic status) is an important determinant of its fertility behaviour has been developed and applied to the explanation of swings in American fertility by R. A. Easterlin. However, a recent application by Butz and Ward of a model derived from the 'new home economics' (pioneered by Becker and Mincer) strongly suggests that relative economic status is not the dominant factor in explaining fertility movements in the U.S.A. Rather, both current men's and women's wages operate independently in explaining the movement in fertility, and in particular the decline in fertility is attributed to rising women's wages. In this paper we explore the relevance of both the Easterlin hypothesis and the hypotheses derived from the 'new home economics' to the 1955-75 fertility swing in Great Britain. We find that we must reject the Easterlin hypothesis on the basis of the measures of relative economic status suggested by Easterlin and Wachter. A variant of the Easterlin hypothesis suggested by Oppenheimer does receive some support from the available evidence, and the evidence provides strong support for the model of fertility behaviour derived from the 'new home economics', which emphasizes the distinction between the effects of changes in men's and women's real wages on fertility decisions. The cause of the fertility decline is attributed to rising women's wages and employment opportunities through their direct effect on the opportunity cost of time and children among working wives and through their effect on the labour force participation of married women of childbearing age. The test of this model and the estimates of its parameters are not definitive, however, because of deficiencies in the data and problems of statistical estimation. We nevertheless conclude that both this model and the Oppenheimer variant of the Easterlin hypothesis, as well as other elements of a more comprehensive economic theory of fertility, point to a continuation of low fertility and the possibility of a secular decline with fertility approaching some lower asymptote.     

Pay-as-you-go social security and endogenous fertility in a neoclassical growth model

This paper theoretically studies how unfunded pay-as-you-go social security affects economic growth, the fertility rate, and welfare in a neoclassical growth model. In addition, this paper considers a more general form of child-rearing cost, which is a mixture of time and money. The first observation is that whether the fertility rate increases or not by the expansion of the pay-as-you-go social security depends on (1) the size of the monetary child-rearing cost relative to the time spent on child-rearing and (2) the current fertility and interest rate in laissez faire. The second observation is that income per worker can increase by an expansion in pay-as-you-go social security when the output elasticity of capital is sufficiently small and the payroll tax rate is high. The last finding is that welfare can be improved even though capital is underaccumulated in an economy.