Complements versus substitutes and trends in fertility choice in dynastic models

Larry E. Jones, Alice Schoonbroodt

Research output: Contribution to journalArticlepeer-review

23 Scopus citations

Abstract

Demographers emphasize decreased mortality and "economic development" as the main contributors generating the demographic transition. Contrary to previous findings, we show that simple dynastic models à la Barro-Becker can reproduce observed changes in fertility in response to decreased mortality and increased productivity growth if the intertemporal elasticity of substitution is low enough. We show that this is largely due to number and welfare of children being substitutes in the utility of parents in this case. We find that with an IES of one-third, model predictions of changes in fertility amount to two-thirds of those observed in U.S. data since 1800.

Original languageEnglish (US)
Pages (from-to)671-699
Number of pages29
JournalInternational Economic Review
Volume51
Issue number3
DOIs
StatePublished - Aug 2010

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