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 - Dec 1 2012

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    ASJC Scopus subject areas

    • Economics, Econometrics and Finance(all)

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