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ENDOGENOUS FERTILITY WITH A SIBSHIP SIZE EFFECT

  • Elise S. Brezis (a1) and Rodolphe Dos Santos Ferreira (a2)

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.

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Corresponding author

Address correspondence to: Rodolphe Dos Santos Ferreira, BETA, Université Louis Pasteur, 61, avenue de la Forêt Noire, 67085 Strasbourg Cedex, France; email: rdsf@unistra.fr.

References

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