College of Economics, Jinan University; International Business School, Beijing Foreign Studies University; Guanghua School of Management, Peking University
Abstract:
The paper examines the effect of planned fertility rate on population and economic growth in an endogenous growth model in which agents face the quantity-quality trade-off when choosing fertility rate. If the output share of the labor-intensive industry is large, increasing rural planned fertility rate may make skill more suitable for the capital deepening, and thus promotes growth. If the productivity differential between the capital-intensive and the labor-intensive industry is low, increasing urban planned fertility rate may promote capital deepening and economic growth. The simulation results show that China’s planned fertility rate most likely depresses economic growth in the long run, although it may induce higher share of skilled labor in the labor force and higher urbanization rate.
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