A Model of Longevity, Fertility and Growth

Economic and demographic outcomes are determined jointly in a dynamic general equilibrium model of longevity, fertility and growth. Reproductive agents in overlapping generations mature safely through two periods of life and face an endogenous probability of surviving for a third period. Given this probability, each agent maximises her expected lifetime utility by choosing consumption and the number of children. Child-bearing is costly in the sense that time must be spent on child-rearing activities rather than on production or education. The model produces multiple development regimes which yield different predictions about life expectancy, fertility, timing of births and educational investment depending on initial conditions. These predictions accord strongly with the empirical evidence on demography and development