A Theory of Endogenous Fertility with Occupational Choice

American Economic Journal - Microeconomics, Forthcoming

36 Pages Posted: 20 Apr 2012

See all articles by Dilip Mookherjee

Dilip Mookherjee

Boston University - Department of Economics

Silvia Prina

Case Western Reserve University - Weatherhead School of Management - Department of Economics

Debraj Ray

New York University (NYU) - Department of Economics; Autonomous University of Barcelona - Instituto de Analisis Economico (CSIC)

Date Written: January 10, 2012

Abstract

This paper introduces endogenous fertility into a model of occupational choice, and studies its steady states. Three main results are obtained. First, despite the presence of both income and substitution effects in fertility choice, general equilibrium effects operating via endogenous wages in steady state yield a negative correlation between parental wages and fertility. Occupational mobility arises in steady state, generated by differential fertility across various occupational categories. Unlike the mobility created by stochastic shocks, such occupational drift has a predictable direction depending on the income-fertility relationship. Steady states are locally determinate, permitting the analysis of the long-run effects of altering child-care or education costs, child labor regulations, redistributive tax-transfer policies and family planning subsidies.

Keywords: inequality, human capital, endogenous fertility, borrowing constraints

JEL Classification: J13, J24, J62

Suggested Citation

Mookherjee, Dilip and Prina, Silvia and Ray, Debraj, A Theory of Endogenous Fertility with Occupational Choice (January 10, 2012). American Economic Journal - Microeconomics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2042656

Dilip Mookherjee

Boston University - Department of Economics ( email )

270 Bay State Road
Boston, MA 02215
United States
617-353-4392 (Phone)
617-353-4143 (Fax)

Silvia Prina (Contact Author)

Case Western Reserve University - Weatherhead School of Management - Department of Economics ( email )

Cleveland, OH 44106
United States

HOME PAGE: http://faculty.weatherhead.case.edu/prina/

Debraj Ray

New York University (NYU) - Department of Economics ( email )

269 Mercer Street, 7th Floor
New York, NY 10003
United States
212-998-8906 (Phone)
212-995-4186 (Fax)

Autonomous University of Barcelona - Instituto de Analisis Economico (CSIC)

Campus UAB
E-08193 Bellaterra
Spain

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