Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/58444 
Year of Publication: 
2012
Series/Report no.: 
IZA Discussion Papers No. 6527
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
It is widely argued that declining fertility slows the pace of economic growth in industrialized countries through its negative effect on labor supply. There are, however, theoretical arguments suggesting that the effect of falling fertility on effective labor supply can be offset by associated behavioral changes. We formalize these arguments by setting forth a dynamic consumer optimization model that incorporates endogenous fertility as well as endogenous education and health investments. The model shows that a fertility decline induces higher education and health investments that are able to compensate for declining fertility under certain circumstances. We assess the theoretical implications by investigating panel data for 118 countries over the period 1980 to 2005 and show that behavioral changes partly mitigate the negative impact of declining fertility on effective labor supply.
Subjects: 
demographic change
effective labor supply
human capital
population health
economic growth
JEL: 
I15
I25
J24
O47
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
393.04 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.