Income-distribution Dynamics with Endogenous Fertility / Michael Kremer, Daniel Chen.

Format:

Book

Author/Creator:

Kremer, Michael.

Contributor:

National Bureau of Economic Research.

Chen, Daniel.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7530.

NBER working paper series no. w7530

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2000.

Summary:

Developing countries with highly unequal income distributions, 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 tends to increase 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. Empirical evidence suggests that the fertility differential between the educated and uneducated is greater in less equal countries, consistent with the model.

Notes:

Print version record

February 2000.