Human Capital, Fertility, and Economic Growth
Gary S. Becker
University of Chicago - Department of Economics; University of Chicago - Booth School of Business
Kevin M. Murphy
University of Chicago; National Bureau of Economic Research (NBER)
Clemson University - John E. Walker Department of Economics; Federal Reserve Bank of Atlanta
NBER Working Paper No. w3414
Our model of growth departs from both the Malthusian and neoclassical approaches by including investments in human capital. We assume, crucially, that rates of return on human capital investments rise, rather than, decline, as the stock of human capital increases, until the stock becomes large. This arises because the education sector uses human capital note intensively than either the capital producing sector of the goods producing sector. This produces multiple steady scares: an undeveloped steady stare with little human capital, low rates of return on human capital investments and high fertility, and a developed steady stats with higher rates of return a large, and, perhaps, growing stock of human capital and low fertility. Multiple steady states mean that history and luck are critical determinants of a country's growth experience.
Number of Pages in PDF File: 44working papers series
Date posted: May 26, 2004
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