Abstract
This article investigates the dynamic interactions among demographic transition, income distribution, and economic growth. Consistent with empirical evidence we show that fertility and income distribution follow an inverted U-shaped dynamics in the process of economic development. In the first stage fertility increases and income inequality widens, whereas in the second stage fertility declines, income becomes more equally distributed, human capital becomes more abundant, and growth of income per capita takes off. The model therefore generates the documented facts about epochs of demographic transition, relying neither on arguments based on “near rationality” nor on noneconomic objectives.
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Dahan, M., Tsiddon, D. Demographic Transition, Income Distribution, and Economic Growth. Journal of Economic Growth 3, 29–52 (1998). https://doi.org/10.1023/A:1009769930916
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DOI: https://doi.org/10.1023/A:1009769930916