From Malthus to Modern Growth: Child Labor, Schooling and Human Capital
35 Pages Posted: 4 Aug 2009
Date Written: February 16, 2009
Abstract
This paper develops a dynamic general equilibrium model of fertility, human capital accumulation, child labor and uncertain child survival focusing on the qualitative and quantitative effect of declining mortality on household decisions and economic development. Due to uncertainty about child survival, parents have a precautionary demand for children. Rising survival probability leads to falling fertility, eventually to investment into schooling and the demise of child labor. Child labor can be an obstacle to development since it lowers the incentives of parents to educate children. Furthermore, the paper argues that the decline of precautionary child demand as a consequence of falling mortality is not sufficient to generate a demographic transition. Falling mortality can only explain a relatively small part of the fertility decline. A sizable reduction in fertility can only be achieved by human capital investment and the induced quantity-quality trade off.
Keywords: Demographic transition, child mortality, precautionary demand, child labor, human capital,
JEL Classification: J11, J13, I12, O11, O40
Suggested Citation: Suggested Citation
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