Fertility, Income Inequality, and Labour Productivity

Posted: 2 Oct 2008

See all articles by Ross S. Guest

Ross S. Guest

Griffith University - School of Accounting and Finance - Gold Coast Campus

Robyn Swift

Griffith University - Department of Accounting, Finance and Economics

Date Written: October 2008

Abstract

There is mounting evidence of a complex system of multi-directional links between fertility, productivity and inequality. The contribution of this study is a multi-country analysis of these three variables as a simultaneous system in a VECM framework using annual time series data for the UK, USA, Australia, Japan, and Sweden. The results highlight some differences between countries in the relationships between the variables. For the UK and Australia, the VECM analysis reveals a long run relationship between fertility and productivity to which both fertility and productivity adjust. This calls into question pro-fertility policies in these countries that aim to offset the costs of population ageing, because an increase in fertility may be associated with lower productivity in the long run. The results for the USA suggest that raising productivity in the long run will be associated with a decrease in both inequality and fertility. No significant long run relationships were found for Japan and Sweden.

JEL Classification: C3, E6, H3, O4

Suggested Citation

Guest, Ross and Swift, Robyn, Fertility, Income Inequality, and Labour Productivity (October 2008). Oxford Economic Papers, Vol. 60, Issue 4, pp. 597-618, 2008. Available at SSRN: https://ssrn.com/abstract=1276663 or http://dx.doi.org/gpn003

Ross Guest (Contact Author)

Griffith University - School of Accounting and Finance - Gold Coast Campus ( email )

PMB 50 Gold Coast Mail Centre
9726 Queensland
Australia

Robyn Swift

Griffith University - Department of Accounting, Finance and Economics ( email )

Nathan Campus
Brisbane QLD, 4111
Australia

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