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Optimal fertility along the life cycle

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Pestieau, Pierre [UCL] Ponthiere, Gregory [Paris School of Economics and Ecole Normale Supérieure]

We explore the optimal fertility timing in a four-period OLG economy with physical capital, whose specificity is to include not one, but two reproduction periods. It is shown that, for a given total fertility rate, the economy exhibits quite different dynamics, depending on the timing of births. If all births take place in the late reproduction period, there exists no stable stationary equilibrium and the economy exhibits cyclical dynamics due to labor growth fluctuations. We characterize the long-run social optimum and show that optimal consumptions and capital depend on the optimal cohort growth factor, so that there is no one-to-one substitutability between early and late fertility. We also extend Samuelson's Serendipity Theorem to our economy and study the robustness of our results to: (1) endogenizing fertility timing, (2) assuming rational anticipations about factor prices, (3) adding a third reproduction period.

Document type Article de périodique (Journal article) – Article de recherche
Access type Accès interdit
Publication date 2014
Language Anglais
Journal information "Economic Theory" - Vol. 55, no.1, p. 185-224 (2014)
Peer reviewed yes
Publisher Springer ((Germany) Heidelberg)
issn 0938-2259
e-issn 1432-0479
Publication status Publié
Affiliation UCL - SSH/LIDAM/CORE - Center for operations research and econometrics
Keywords childbearing ages ; early and late motherhoods ; fertility ; overlapping generations ; social optimum
Links
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Bibliographic reference Pestieau, Pierre ; Ponthiere, Gregory. Optimal fertility along the life cycle. In: Economic Theory, Vol. 55, no.1, p. 185-224 (2014)
Permanent URL http://hdl.handle.net/2078.1/146890