Cheap Children and the Persistence of Poverty

30 Pages Posted: 30 Nov 2001

See all articles by Omer Moav

Omer Moav

University of Warwick - Department of Economics; Centre for Economic Policy Research (CEPR)

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Date Written: November 2001

Abstract

This Paper develops a theory of fertility and child educational choice that offers an explanation for the persistence of poverty within and across countries. The joint determination of the quality (education) and quantity of children in the household is studied under the key assumption that individuals' productivity as teachers increases with their own human capital. As a result, the poor choose high fertility rates with low education investment and therefore, their offspring are poor as well. Furthermore, the high fertility rates in poor economies dilute physical capital accumulation and amplify the effect of child quality choice on economic growth. The model generates multiple steady states even though the technologies employed in the production of human capital and output are convex and preferences are convex and homothetic.

Keywords: Fertility, human capital, growth

JEL Classification: J13, O11, O15, O40

Suggested Citation

Moav, Omer, Cheap Children and the Persistence of Poverty (November 2001). CEPR Discussion Paper No. 3059. Available at SSRN: https://ssrn.com/abstract=292654

Omer Moav (Contact Author)

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom

HOME PAGE: http://www2.warwick.ac.uk/fac/soc/economics/staff/academic/moav

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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