Inequality and Growth: Why Differential Fertility Matters
American Economic Review
vol. 93,
no. 4, September 2003
(pp. 1091-1113)
Abstract
We develop a new theoretical link between inequality and growth. In our model, fertility and education decisions are interdependent. Poor parents decide to have many children and invest little in education. A mean-preserving spread in the income distribution increases the fertility differential between the rich and the poor, which implies that more weight gets placed on families who provide little education. Consequently, an increase in inequality lowers average education and, therefore, growth. We find that this fertility-differential effect accounts for most of the empirical relationship between inequality and growth. (JEL J13, O40)Citation
de la Croix, David, and Matthias Doepke. 2003. "Inequality and Growth: Why Differential Fertility Matters." American Economic Review, 93 (4): 1091-1113. DOI: 10.1257/000282803769206214JEL Classification
- J13 Fertility; Family Planning; Child Care; Children; Youth
- O47 Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity