Abstract:Changes in fertility have long been recognized as important correlates of economic growth with the relationship between the level of fertility and the level of income per capita being one of the stron...Changes in fertility have long been recognized as important correlates of economic growth with the relationship between the level of fertility and the level of income per capita being one of the strongest observable correlations in cross-country data. This paper examines the linkages between fertility and growth theory. The structure of the model is presented in sections on production couples decision making system dynamics and steady-state equilibria. The first component of the model is that increases in capital per worker raise womens relative wages since capital is more complementary to womens labor input than to mens. The second component is that increasing womens relative wages reduces fertility by raising the cost of children more than household income. Finally lower fertility raises the level of capital per worker. A positive feedback loop generates demographic transition a rapid decline in fertility accompanied by accelerated output growth.Read More