ECON WPS - Vienna University of Technology Working Papers in Economic Theory and Policy 04/2011
Conventional R&D-based growth theory suggests that productivity growth is positively correlated with population size or population growth, an implication which is hard to see in the data. Here we integrate R&D-based growth into a unified growth setup with micro-founded fertility and schooling behavior. We then show how a Beckerian child quality-quantity trade-off explains why higher growth of productivity and income per capita are associated with lower population growth. The medium-run prospects for future economic growth - when fertility is going to be below replacement level in virtually all developed countries - are thus much better than predicted by conventional R&D-based growth theory.
R&D unified growth theory declining population fertility schooling human capital post-modern society