A theory of occupational choice with endogenous fertility

Dilip Mookherjee, Silvia Prina, Debraj Ray

    Research output: Contribution to journalArticle

    Abstract

    Theories based on partial equilibrium reasoning alone cannot explain the widespread negative cross-sectional correlation between parental wages and fertility, without restrictive assumptions on preferences and childcare costs. We argue that incorporating a dynamic general equilibrium analysis of returns to human capital can help explain observed empirical patterns. Other by-products of this theory include explanations for intergenerational mobility without stochastic shocks, connections between mobility and fertility patterns, and locally determinate steady states. Comparative statics exercises on steady states shed light on the effects of education, childcare subsidies, child labor regulations, and income redistribution policy on long run living standards. (JEL H23, I31, J13, J24, J62, J82).

    Original languageEnglish (US)
    Pages (from-to)1-34
    Number of pages34
    JournalAmerican Economic Journal: Microeconomics
    Volume4
    Issue number4
    DOIs
    StatePublished - 2012

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    Child care
    Occupational choice
    Fertility
    Endogenous fertility
    Intergenerational mobility
    Comparative statics
    Standard of living
    Subsidies
    Labor regulation
    By-products
    Labor income
    Dynamic general equilibrium
    Costs
    Partial equilibrium
    General equilibrium analysis
    Income redistribution
    Wages
    Human capital
    Child labor
    Exercise

    ASJC Scopus subject areas

    • Economics, Econometrics and Finance(all)

    Cite this

    A theory of occupational choice with endogenous fertility. / Mookherjee, Dilip; Prina, Silvia; Ray, Debraj.

    In: American Economic Journal: Microeconomics, Vol. 4, No. 4, 2012, p. 1-34.

    Research output: Contribution to journalArticle

    Mookherjee, Dilip ; Prina, Silvia ; Ray, Debraj. / A theory of occupational choice with endogenous fertility. In: American Economic Journal: Microeconomics. 2012 ; Vol. 4, No. 4. pp. 1-34.
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