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Fertility Choices, Human Capital Accumulation, and Endogenous Volatility

By Dimitrios Varvarigos


In a three-period overlapping generations model, I show that different\ud combinations of preference and technological parameters can lead to different\ud patterns on the joint evolution of human capital and (endogenous) fertility\ud choices. These patterns may include threshold effects and multiple equilibria as\ud well as endogenous fluctuations. In the latter case, fertility is procyclical.\ud Contrary to existing analyses, endogenous economic fluctuations emerge only\ud when the substitution effects (rather than the income effects) dominate. I also\ud show that the elasticity of intertemporal substitution may be an additional factor\ud determining whether the economy can sustain a positive growth rate in the longrun

Topics: Fertility, Human capital, Cycles
Publisher: Dept. of Economics, University of Leicester
Year: 2010
OAI identifier: oai:lra.le.ac.uk:2381/9250

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