TY  - JOUR
AU  - Kremer,Michael
AU  - Chen,Daniel
TI  - Income-distribution Dynamics with Endogenous Fertility
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7530
PY  - 2000
Y2  - February 2000
UR  - http://www.nber.org/papers/w7530
L1  - http://www.nber.org/papers/w7530.pdf
N1  - Author contact info:
Michael Kremer
Harvard University
Department of Economics
Littauer Center M20
Cambridge, MA 02138
Tel: 617/495-9145
Fax: 617/495-7730
E-Mail: mkremer@fas.harvard.edu

Daniel Chen
Duke University
E-Mail: DChen@law.duke.edu
AB  - Developing countries with highly unequal income distributions, such as Brazil or South Africa, face an uphill battle in reducing inequality.  Educated workers in these countries have a much lower birthrate than uneducated workers.  Assuming children of educated workers are more likely to become educated, this tends to increase the proportion of unskilled workers, reducing their wages, and thus their opportunity cost of having children, creating a vicious cycle.  A model incorporating this effect generates multiple steady-state levels of inequality, suggesting that in some circumstances, temporarily increasing access to educational opportunities could permanently reduce inequality. Empirical evidence suggests that the fertility differential between the educated and uneducated is greater in less equal countries, consistent with the model.
ER  -