Skill Composition, Fertility, and Economic Growth

Authors

  • Creina Day

    Corresponding author
    1. Australian National University
    • Correspondence to: Creina Day, Arndt Corden Department of Economics, Crawford School of Public Policy, Building 9, Australian National University, Canberra ACT 0200, Australia (creina.day@anu.edu.au).

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  • Note: The helpful comments and suggestions of two anonymous referees and Robert J. Hill on an earlier draft are gratefully acknowledged.

Abstract

While high fertility persists in the poorest countries and fertility declines with per capita income in developing countries, fertility and per capita income are now positively associated across most developed countries. This paper presents a model where a U-shaped relationship between overall fertility and per capita income reflects within country differences in workforce skill composition and household choice of occupation, fertility, and childrearing. The fraction of skilled workers rises with economic growth. By allowing for both differences in the fertility of skilled and unskilled workers and purchased childrearing inputs, we explain a poverty trap with high fertility, fertility decline with economic development, and the possible reversal of fertility decline in a developed economy where most workers are skilled.

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