Fertility and economic growth: The role of workforce skill composition and child care prices

    Research output: Contribution to journalArticle

    Abstract

    This paper presents an overlapping generations model that incorporates choice of occupation (education), fertility, how to rear children, and a market for child care. The dynamic interplay between economic growth and fertility is examined as an economy moves through two phases distinguished by the skill composition of the workforce. In the initial phase, the economy comprises skilled and unskilled workers. In the second phase, all workers are skilled. Skilled workers are shown to have fewer children than less educated workers. Aggregate fertility initially declines as the fraction of skilled workers rises with economic growth, and then may recover as the fertility of a skilled workforce rises with skilled wages, for given child care prices. However, in equilibrium, child care prices rise proportionally to skilled wages when child care is produced with constant returns to skilled labour. Results indicate that whether or not the rise in fertility witnessed in high-income countries will continue depends on each country's structure of child care.
    Original languageEnglish
    Pages (from-to)546-565
    JournalOxford Economic Papers
    Volume68
    Issue number2
    DOIs
    Publication statusPublished - 2016

    Fingerprint

    Dive into the research topics of 'Fertility and economic growth: The role of workforce skill composition and child care prices'. Together they form a unique fingerprint.

    Cite this