TY - JOUR
T1 - Inequality and growth
T2 - Why differential fertility matters
AU - De La Croix, David
AU - Doepke, Matthias
PY - 2003/9
Y1 - 2003/9
N2 - We develop a new theoretical link between inequality and growth. In our model, fertility and education decisions are interdependent. Poor parents decide to have many children and invest little in education. A mean-preserving spread in the income distribution increases the fertility differential between the rich and the poor, which implies that more weight gets placed on families who provide little education. Consequently, an increase in inequality lowers average education and, therefore, growth. We find that this fertility-differential effect accounts for most of the empirical relationship between inequality and growth.
AB - We develop a new theoretical link between inequality and growth. In our model, fertility and education decisions are interdependent. Poor parents decide to have many children and invest little in education. A mean-preserving spread in the income distribution increases the fertility differential between the rich and the poor, which implies that more weight gets placed on families who provide little education. Consequently, an increase in inequality lowers average education and, therefore, growth. We find that this fertility-differential effect accounts for most of the empirical relationship between inequality and growth.
UR - https://www.scopus.com/pages/publications/1442318411
UR - https://www.scopus.com/inward/citedby.url?scp=1442318411&partnerID=8YFLogxK
U2 - 10.1257/000282803769206214
DO - 10.1257/000282803769206214
M3 - Article
AN - SCOPUS:1442318411
SN - 0002-8282
VL - 93
SP - 1091
EP - 1113
JO - American Economic Review
JF - American Economic Review
IS - 4
ER -
