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Ann Arbor, Michigan, University Microfilms International, 1993. viii, 117 p.The author models fertility and economic growth simultaneously in overlapping generations frameworks. The first chapter focuses upon the relationship between fertility and wage rates, examining the effects on fertility and growth of subsidies for education and for the cost of rearing children by assuming that agents care about the consumption and number of children. Chapter two compares fertility and economic growth between economies with or without markets and firms by assuming that agents are concerned about the consumption of their old parents and/or the consumption and the number of their children. It is shown that transforming a traditional economy into a market economy brings about lower fertility but faster growth of per capita output if altruism is one-sided towards parents. Chapter three then investigates the effects of social security upon fertility and economic growth. It is shown that an unfunded social security program may speed up economic growth by reducing fertility and increasing the ratio of human capital investment per child to family income even if saving rates fall, and may bring about faster economic growth than a funded program. Even if fertility is exogenous and private intergenerational transfers are operative, the neutrality of unfunded social security fails to hold due to human capital investment in children, although the saving rate is unchanged.
QUARTERLY JOURNAL OF ECONOMICS. 1988 Feb; 103(1):1-25.An economic analysis of the linkages in fertility rates and capital accumulation across generations is developed, considering the determination of fertility and capital accumulation in each generation when wage rates and interest rates are parameters to each family and to open economies. The model is based on the assumption that parents are altruistic toward their children. The utility of parents depends on their own consumption and on the utility of each child and the number of children. By relating the utility of children to their own consumption and to the utility of their children, a dynastic utility function was obtained that depends on the consumption and number of descendants in all generations. The term "reformulation" was used because of the emphasis on dynastic utility model of altruism toward children and deriving the budget constraint and utility function of a dynastic family, the model was applied to the Great Depression and World War II. The 1st-order conditions to maximize utility imply that fertility in any generation depends positively on the real interest rate and the degree of altruism and negatively on the rate of growth in per capita consumption from 1 generation to the next. Consumption of each descendant depends positively on the net cost of rearing a desdendant. Applying the model, it is shown that the analysis is consistent with baby busts during the Depression and the war and with a baby boom after the war. The effects on fertility of child mortality, subsidies to (or taxes on) children, and social security and other transfer payments to adults were considered. The demand for surviving children rises during the transition to low child mortality, but demand for survivors return to its prior level once mortality stabilizes at a low level. Fertility falls in response to declines in international real interest rates and increases in an economy's rate of technological progress. Extending the analysis to include life-cycle variations in consumption, earnings, and utility, fertility emerges as a function of expenditures on the subsistence and human capital of children but not of expenditures that simply raise the consumption of children. The path of aggregate consumption in demographic steady states does not depend on interest rates, time preference, or other determinants of life-cycle variations in consumption.
POPULATION AND DEVELOPMENT REVIEW. 1986; 12 Suppl:69-76.The economic approach to fertility emphasizes the effects of parents' income and the cost of rearing children. With a few exceptions, this approach has neglected the analytical links between decisions by different generations of the same family. This article develops the implications of altruism toward children, where utility of parents depends on their own consumption, their fertility, and the utility of each of their children. Altruism toward children implies that the welfare of all generations of a family is linked through a dynastic utility function that depends on the consumption, fertility, and number of descendants in all generations. The head of a dynastic family acts as if he maximizes dynastic utility subject to a dynastic budget constraint, which involves the wealth inherited by the head, interest rates, the cost of rearing children in all generations, and the earnings of all descendants. The authors neglect uncertainty, marriage, the spacing of births, and capital-market restraints over life cycles and across generations. Nevertheless, even a highly simplified model of altruism toward children and the behavior of dynastic families appears to us to capture important important aspects of the dynamic behavior of fertility and consumption. If so, a new approach would be warranted to the analysis of trends and long-term fluctuations in fertility, population growth, and consumption.
[Unpublished] 1985 Mar. 55 p.This study presents new analysis and evidence on the link between population growth and national saving. Analysis was based on the variable rate-of-growth effect model (Mason, 1981; Fry and Mason, 1982), which distinguishes 2 population growth effects: the rate of growth effect and the dependency effect. The paper's 1st section reviews previous research on the saving population growth link, including applications of the variable rate-of-growth effect model. Its 2nd part presents an extension of the variable rate-of-growth effect model by linking factors determining the number of children reared to the budget shares devoted to childbearing and, in turn, to the national saving rate. Part 3 presents estimates from international cross-section data covering the 1960-80 period. The final section uses the neoclassical growth model to show circumstances under which the rate of growth effect dominates the dependency effect reversing the relationship between population growth and saving. Available evidence from the international cross-section supports the proposition that a higher dependency ratio leads to lower saving, particularly among countries with moderate to high rates of income growth. At the mean rate of growth observed over the last 2 decades for the 70 countries analyzed, a decline from a high to a low childbearing regime generated an increase in the net national saving rate of about 5% -- nearly a 50% increase. The results reported also addressed the magnitude and validity of the equivalent adult consumer unit. Aggregate consumption data imply an equivalent adult consumer unit of about 1/3. The analysis implies that simulation models that are based on equivalent adult consumer unit can provide useful insights about the relationship between population growth and aggregate consumption and saving rates. The analysis fails to fully resolve the issue of the relative importance of the rate of growth and dependency effects. It is based on the neoclassical growth model for which the equilibrium rate of growth of national income increases point for point with an increase in the rate of growth of population. Given the long periods required to adjust from one equilibrium to another, the steady-state results of the neoclassical model may have limited relevance to the design and evaluation of development and population policy. Although the model proposed clearly delineates the link between children, household saving, and national saving, the role ascribed to children is limited. Only that children require household resources for their support is acknowledged.
In: Population policies in Asian countries: contemporary targets, measures and effects, edited by Hermann Schubnell. Lubeck, Germany, Federal Republic of, Drager Foundation, 1984. 429-43. (Centre of Asian Studies Occasional Papers and Monographs no. 57)Population policy conforming to socioeconomic development needs to be broadly defined and organized. This term is used as a collective notion for all sorts of political action designed to influence population trends according to specific objectives. The objectives, which are usually expressed in terms of demographic numbers or rates and related to a fixed period, need to meet 2 main requirements: they must comply with anticipated socioeconomic change on the macro-level as well as with needs and interests on the micro-level. When designing population policies, both levels must be considered, the one for determining desirable objectives and the other for choosing suitable strategies to realize the objectives. The discussion first examines the impact of population growth on the macro-level and then draws conclusions for appropriate policies. All developing countries are working for quick modernization and all want to raise productivity, to overcome economic dualism, and to promote sectoral and regional integration. Considering these common goals, the discussion turns to the question of how population trends at the various stages of transition correspond with the need to speed up socioeconomic progress. Leaving migration aside, the salient demographic factors to be considered are fertility and mortality. All economic problems caused by population growth arise from the respective conditions of births and deaths. These conditions are also the targets of population policy. A fall in mortality is a prerequisite for socioeconomic change. Mortality decline should be promoted despite the fact that the population will then grow more quickly. The problems which plague most developing countries with rapid population growth such as severe underemployment, unemployment and excessive urbanization are supported by persistent high fertility, but not by falling mortality. Only if fertility decreases will the other important d emographic obstacle to economic progress, i.e., the high dependency burden, become smaller. To show the basic effects of various fertility and mortality levels on such economically relevant facts as length of working life, youth dependency, and costs of raising the young generation, 3 models are used which correspond to 3 stages of demographic transition -- ongoing transition, advanced transition, and late transitional stage. The exercise shows that birth decline tends to improve consumption standards and in this way to influence economic development before the labor force is directly affected. Almost all developing countries need population policies to set in motion and speed up a fall in birth of either total population or certain population groups. Communal self help activities are particularly useful as part of programs aimed at inducing and speeding up fertility declines. Measures in the field of family planning, which are now the core of the programs, will be accepted more readily if families regard them as a means of improving social well-being.
Research in Population Economics. 1984; 5:29-50.A model of life cycle fertility is developed using the language and framework of optimal control theory. The chief characteristic of children that distinguishes them from other consumer durables is, in the language of the optimal growth theory, the "irreversibility of investment." As the good does not depreciate in the ordinary sense, the stock must be monotonically nondecreasing over time. The optimal profile of fertility is, for this reason, characterized by the same type of "bang-bang" behavior found in many optimal growth problems. Yet, the fertility decision is complicated considerably by several other factors. Chief among these is the intrinsic relation to the labor-supply decision, for having children implies inevitable constraints on the mother's or father's time. Thus, optimal labor-supply decisions also must be considered. The model is developed in stages, proceeding from very simple to the more complex models. 1 section introduces the impact of fertility on the future demands for home time. It is shown that optimal fertility profiles follow turnpike paths similar to those in the growth-theory literature. A subsequent section introduces labor-supply and human-captial considerations. As the models become more complex, solutions become harder to derive and are often only outlined. The analysis provides some theoretical basis for expecting certain shapes of the life-cycle profiles of fertility, labor supply, and wages. Fertility profiles may be of 2 shapes--one beginning at a high rate, falling to a lower rate, then to zero; and one beginning at zero, rising to a moderate rate, then falling back down to zero. Labor supply profiles can be of a number of different shapes, but the impact of childbearing is to lower hours worked during the early childrearing period. As the children mature, hours worked rise (or at least fall more slowly) as home time responsibilities lessen, although the level to which they rise will probably be lower than before the 1st birth. Log-wage profiles rise during the period before the 1st birth, then either fall or rise more slowly during the early years of childbearing, and then rise again as the children mature. These shapes have been inferred from a control-theory model that is quite complex and which could use considerably more delineation than has been achieved here. Closed-form solutions to the model have not been obtained, nor have any formal comparative dynamics been performed. As the model stands it is too complex to be empirically implemented. Such implementation would be desirable.
In: Luz y sombra de la vida: mortalidad y fecundidad en Bolivia [Light and dark of life: mortality and fertility in Bolivia], by Carlos Carafa, Gerardo Gonzalez, Valeria Ramirez, Rene Pereira, and Hugo Torrez La Paz, Bolivia, Proyecto Politicas de Poblacion, 1983. 1-42.Bolivia's population policy must be framed within 3 contexts: an economic and family structure which conditions production and reproduction; as part of Latin America, which is characterized by dependent development, structural heterogeneity, and social differentiation; and as a particlar socioeconomic structure with specific population dynamics. As a peripheral country subordinate to the developed capitalist nations, Bolivia has undergone a process of social differentiation. Mining, which has shaped the economy and society, is declining. Agriculture dominates in terms of jobs, but peasant farms cannot compete with agribusiness. A weak manufacturing sector and increasing urbanization have created vast underemployment and a swollen tertiary sector. Urban-rural disparities have widened. Only 2% of all rural health care needs are met; water and sewerage services are similarly deficient. As the main investor and largest employer, the government can guide development, but its policies have favored agroindustrial interests at the expense of the small farmer. These realities suggest the following working hypotheses: 1) the size, structure and growth of the population determines both the supply of labor and the demand for goods and services. 2) Bolivia's unbalanced occupational structure heightens class differences and disparities in life chances; reproductive patterns reflect the population's social and material circumstances. 3) Outmigration is the peasantry's response to the crisis of the rural areas; migratory movement follow economic activity. 4) Mortality and fertility differentials reflect socioeconomic and cultural differences; rural families see children as assets; 5) The costs fo bearing and raising children do not affect reproductive decisions among the peasantry. 6) Early marriages, low use of contraceptives, low education all interact to raise the fertility of peasant women; these factors are weaker among salaried workers. 7) Urbanization unleashes a number of changes which depress fertility; traditional values are eclipsed by the costs of childbearing. 8) Mortality risks are higher in the rural areas and affect all subgrups; urban areas exhibit greater variation. 9) Disparities in death and fertility rates suggest that different subgroups are at different stages of the demographic transition. Bolivia as a whole is in the 1st stage of this process.
[Unpublished] 1983. 40 p.Add to my documents.
In: Women: a developmental perspective. Edited by Phyllis W. Berman and Estelle R. Ramey. Washington, D.C., U.S. Dept. of Health and Human Services, 1982. 207-219.Add to my documents.
Journal of Comparative Family Studies. 1983 Autumn; 14(3):283-298.Add to my documents.
American Demographics. 1983 Aug; 5(8):16-21, 45.Add to my documents.
Consumption, family size, schooling and labour supply decisions: estimates of a linear expenditure system for Bangladesh.
Hamilton, Ontario, Canada, Program for Quantitative Studies in Economics and Population, McMaster University, 1983. 48 p. (QSEP research report, no. 77)Add to my documents.