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Inequality and Growth: Why Differential Fertility Matters

de la Croix, David, Doepke, Matthias·2003·American Economic Review

Abstract

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.

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Metadata

Authors
de la Croix, D., & Doepke, M.
Venue
American Economic Review
Published
2003-08-01
Volume
93
Issue
4
Pages
1091-1113
ISSN
0002-8282 (ISSN-L)
OpenAlex
W2087229412
Cited by
766
References
1
FWCI
61.68
Type
journal article
Language
en
Open access
closed

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