Optimal Lifecycle Fertility in a Barro Becker Economy

Pierre Pestieau (1, 2, 3, 4, 5) , Grégory Ponthière (2, 3)

1 CREPP - Center of Research in Public Economics and Population Economics
2 PSE - Paris-Jourdan Sciences Economiques
3 PSE - Paris School of Economics
4 CORE - Center of Operation Research and Econometrics [Louvain]
5 CEPR - Center for Economic Policy Research

Parenthood postponement is a key demographic trend of the last three decades. In order to rationalize that stylized fact, we extend the canonical model by Barro and Becker (1989) to include two - instead of one reproduction periods. We examine how the cost structure of early and late children in terms of time and goods a¤ects the optimal fertility timing. Then, focusing a stationary equilibrium with stationary population, we provide two alternative explanations for the observed postponement of births: (1) a fall of the direct cost of late children (thanks to medical advances); (2) a rise in hourly productivity, which increases the (relative) opportunity costs of early children in comparison to late children.

Mots clés: Fertility; Birth Timing; Population; Dynastic Altruism; OLG Model

Domaines: Economies et finances

Pierre Pestieau, Grégory Ponthière. Optimal Lifecycle Fertility in a Barro Becker Economy. 2012. ⟨halshs-00676500⟩