- Thursday, May 9
- 12:15 PM
- Kaiserplatz 7-9, 4th floor, Room 4.006
The Rise and Fall of Family Size: Efficient Human Capital Investment and Fertility.
This paper provides a theoretical analysis of fertility in a model where parents can increase children’s income both from investing in children’s human capital and by transferring income that derives from investment in physical capital. The analysis shows that an increase in the rates of return to investment in children’s human capital induces parents to have more children when human capital investment is efficient. A dynamic analysis reveals how changes in the returns to human capital investment, via its effect on the dynamics of intergenerational transfers, can help explain the observed long-run co-evolution of absolute income mobility and average fertility as well as changes over time in the association between socioeconomic status and fertility across families.