Fertilidad Y Crecimiento Economico

The E¤ect of Fertility Reduction on Economic Growth_
Quamrul H. Ashrafy David N. Weilz Joshua Wildex
October 2012
Abstract
We assess quantitatively the e¤ect of exogenous reductions in fertility on output per
capita. Our simulation model allows for e¤ects that run through schooling, the size
and age structure of the population, capital accumulation, parental time input into
child-rearing,and crowding of .xed natural resources. The model is parameterized
using a combination of microeconomic estimates, data on demographics and natural
resource income in developing countries, and standard components of quantitative
macroeconomic theory. We apply the model to examine the e¤ect of a change in
fertility from the UN medium-variant to the UN low-variant projection, using Nigerianvital rates as a baseline. For a base case set of parameters, we .nd that such a change
would raise output per capita by 5.6 percent at a horizon of 20 years, and by 11.9
percent at a horizon of 50 years.
Keywords: Fertility, Population size, Age structure, Child quality, Worker experience,
Labor force participation, Capital accumulation, Natural resources, Income per capita
JEL Codes: E17, J11,J13, J18, J21, J22, J24, O11, O13, O55
_We thank Günther Fink, Andrew Foster, Stelios Michalopoulos, Alexia Prskawetz, and participants
at Bar-Ilan Univeristy, the 2010 NEUDC Conference, the IUSSP Seminar on .Demographics and
Macroeconomic Performance,.Paris, 2010, the 4th Annual .PopPov.Research Conference on .Population,
Reproductive Health, and Economic Development,.Cape Town, 2010, andthe conference, .China and the
West 1950.2050: Economic Growth, Demographic Transition and Pensions,.University of Zurich, 2011, for
comments, and Daniel Prinz for research assistance. Financial support from the William and Flora Hewlett
Foundation and the MacArthur Foundation is gratefully acknowledged.
yWilliams College and Harvard Kennedy School.
zBrown University and NBER.
xUniversity ofSouth Florida.
1 Introduction
How does population growth a¤ect economic growth? More concretely, in the context of a
high-fertility developing country, how much higher would income per capita be if the fertility
rate were to fall by a speci.ed amount? This is an old question in economics, going back
at least to Malthus (1798). Over the last half century, the consensus view has shifted fromfertility declines having strong e¤ects, to their not being very important, and recently back
toward assigning them some signi.cance (Sindig 2009; Das Gupta, Bongaarts, and Cleland
2011).
For an issue that has been studied for so long, and with such potential import,
the base of evidence regarding the economic e¤ects of fertility (or population growth more
generally) is rather weak. In someways, this should not be a surprise. Population growth
changes endogenously as a country develops. Further, factors that impact population, such
as changes in institutions or culture, are also likely to a¤ect economic growth directly, and
they are poorly observed as well. Finally, the lags at which fertility changes a¤ect economic
outcomes may be fairly long. Thus, at the macroeconomic level, itis very hard to sort out
the direct e¤ects of population growth from those of other factors. Much of the current
thinking about the aggregate e¤ects of fertility decline relies on results from cross-country
regressions in which the dependent variable is growth of GDP per capita and the independent
variables include measures of fertility and mortality, or else measures of the age structure ofthe population. However, as discussed in Section 2, there are severe econometric problems
with this approach.
Our goal in this paper is to quantitatively analyze the economic e¤ects of reductions
in fertility in a developing country where initial fertility is high. We ask how economic
measures such as GDP per capita would compare in the case where some exogenous change
reduces fertility to...