Working Paper: CEPR ID: DP1157
Authors: Oded Galor; David N. Weil
Abstract: This paper examines a novel mechanism linking fertility and growth. There are three components to the model. First, increases in capital per worker raise women's relative wages, since capital is more complementary to women's labour input than to men's. Second, increasing women's relative wages reduces fertility by raising the cost of children more than household income. Third, lower fertility raises the level of capital per worker. This positive feedback loop generates a demographic transition: a rapid decline in fertility accompanied by accelerated output growth.
Keywords: fertility; growth; gender gap; multiple equilibria; development traps
JEL Codes: J13; J16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher capital per worker (D29) | Higher women's relative wages (J31) |
| Higher women's relative wages (J31) | Lower fertility (J13) |
| Lower fertility (J13) | Higher capital per worker (D29) |
| Higher capital per worker (D29) | Lower fertility (J13) |