Working Paper BETA #2017-11

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Title : The love for children hypothesis and the multiplicity of fertility rates

Author(s) : Paolo Melindi Ghidi, Thomas Seegmuller

Abstract : As illustrated by some French departments, how can we explain the existence of equilibria with different fertility and growth rates in economies with the same fun­damentals, preferences, technologies and initial conditions? To answer this question we develop an endogenous growth model with altruism and love for children. We show that independently from the type of altruism, a multiplicity of equilibria might emerge if the degree of love for children is high enough. We refer to this condition as the love for children hypothesis. Then, the fertility rate is determined by expec­tations on the future growth rate and the dynamics are not path-dependent. Our model is able to reproduce different fertility behaviours in a context of completed demographic transition independently from fundamentals, preferences, technologies and initial conditions.

Key-words : Fertility, Love for Children, Expectations, Endogenous Growth, Balanced Growth Path.

JEL Classification : J13, 041, Dll