Abstract:
This paper focuses on explaining the demographic transition. We show that with the capital accumulation, the output share of mental labor increases and the wage gender gap narrows. In the early stages of economic development, gender discrimination is more prevalent and the substitution effect of capital accumulation is dominated by the income effect, so that the growth rate of the population increases with income. When the degree of wage gender discrimination starts to decline, the increased cost of child rearing induces families to invest more in human capital and the growth rate of the population falls.
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