NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Complements versus Substitutes and Trends in Fertility Choice in Dynastic Models

Larry E. Jones, Alice Schoonbroodt

NBER Working Paper No. 13680
Issued in December 2007
NBER Program(s):   CH   EFG   HE

The Barro-Becker model is a simple intuitive model of fertility choice. In its original formulation, however, it has not been very successful at reproducing the changes in fertility choice in response to decreased mortality and increased income growth that demographers have emphasized in explaining the demographic transition. In this paper we show that this is due to an implicit assumption that number and utility of children are complements, which is a byproduct of the high intertemporal elasticity of substitution (IES) typically assumed in the fertility literature. We show that, not only is this assumption not necessary, but both the qualitative and quantitative properties of the model in terms of fertility choice change dramatically when substitutability and high curvature are assumed. To do so, we first derive analytical comparative statics and perform quantitative experiments. We find that if IES is less than one, model predictions of changes in fertility amount to about two-thirds of those observed in U.S. data since 1800. There are two major sources to these predicted changes, the increase in the growth rate of productivity which accounts for about 90 percent of the predicted fall in fertility before 1880, and changes in mortality which account for 90 percent of the predicted change from 1880 to 1950.

download in pdf format
   (531 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

This paper is available as PDF (531 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w13680

Published: Larry E. Jones & Alice Schoonbroodt, 2010. "Complements Versus Substitutes And Trends In Fertility Choice In Dynastic Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(3), pages 671-699, 08. citation courtesy of

Users who downloaded this paper also downloaded these:
Jones, Schoonbroodt, and Tertilt w14266 Fertility Theories: Can They Explain the Negative Fertility-Income Relationship?
Jones and Tertilt w12796 An Economic History of Fertility in the U.S.: 1826-1960
Jones, Schoonbroodt, and Tertilt Fertility Theories: Can They Explain the Negative Fertility-Income Relationship?
Falcao and Soares w12838 The Demographic Transition and the Sexual Division of Labor
Cohen, Dehejia, and Romanov w13700 Do Financial Incentives Affect Fertility?
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us