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ENDOGENOUS FERTILITY WITH A SIBSHIP SIZE EFFECT

Published online by Cambridge University Press:  16 October 2015

Elise S. Brezis  and
Rodolphe Dos Santos Ferreira
Elise S. Brezis
Affiliation:
Bar-Ilan University
Rodolphe Dos Santos Ferreira*
Affiliation:
BETA, CNRS and University of Strasbourg
*
Address correspondence to: Rodolphe Dos Santos Ferreira, BETA, Université Louis Pasteur, 61, avenue de la Forêt Noire, 67085 Strasbourg Cedex, France; email: [email protected].
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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.

Keywords

Endogenous FertilityIntergenerational TransfersHuman Capital FormationDemographic Transition
Type
Articles
Information
Macroeconomic Dynamics , Volume 20 , Special Issue 8: Technology Aspects in the Process of Development , December 2016 , pp. 2046 - 2066
Copyright
Copyright © Cambridge University Press 2015 

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