Optimal lifecycle fertility in a BarroBecker eco

Authors: Pierre Pestieau Gregory Ponthiere

Publish Date: 2014/06/04

Volume: 28, Issue: 1, Pages: 45-87

PDF Link

Abstract

Parenthood postponement is a key demographic trend of the last three decades In order to rationalize that stylized fact we extend the canonical model by Barro and Becker Econometrica 57481–501 1989 to include two—instead of one—reproduction periods We examine how the cost structure of early and late children in terms of time and goods affects the optimal fertility timing Then we identify conditions that guarantee the existence and uniqueness of a stationary equilibrium with a stationary cohort size Finally we examine how the model can rationalize the observed postponement of births and we highlight two plausible causes 1 a general rise in the cost of children in terms of goods and 2 a decline in the degree of family altruismThus whether the marginal impact of raising early fertility is larger than the marginal impact of raising late fertility depends on whether the cohort size is growing over time or not If N t N t − 1 or g t 1 we necessarily have everything else being unchanged that frac partial N t+1+jpartial n tfrac partial N t+1+jpartial m t

Keywords: