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| Author: | Kremer, M. Chen, D. L. |
| Title: | Income distribution dynamics with endogenous fertility |
| Journal: | Journal of Economic Growth
2002 : SEP, VOL. 7:3, p. 227-258 |
| Index terms: | Income distribution Population fertility Inequality |
| Language: | eng |
| Abstract: | Developing countries with highly unequal income distribution, such as Brazil or South Africa, face an uphill battle in reducing inequality. Educated workers in these countries have a much lower birthrate than uneducated workers. Assuming children of educated workers are more likely to become educated this fertility differential increases the proportion of unskilled workers, reducing their wages, and thus their opportunity cost of having children, creating a vicious cycle. A model incorporating this effect generates multiple steady-state levels of inequality, suggesting that in some circumstances, temporarily increasing access to educational opportunities could permanently reduce inequality. Empircal evidence suggests that the fertility differential between the educated and uneducated is greater in less equal countries, consistent with this model. |
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