Children Versus Ideas: an “Influential” Theory of Demographic Transition

In this paper, I build on Blackmore (2000) to propose a formal theory of demographic transition (fertility decline) and associated growth of the stock of knowledge. The novelty of this theory is to entirely exclude private consumption from the objective function of the decision makers, and to assume that their goal is to maximize their social influence, that is, the number of people in the next generation utilizing their ideas. With high communication costs, one’s ideas are utilized mainly by his/her children, which creates an incentive to have as many children as possible. With modern communication technologies, one’s ideas can be used by millions, which makes people invest time into improvement of own ideas rather than production of children. Even those who can influence only their own children are induced to have smaller families and improve own ideas, because their children now have access not only to ideas of parents but also to ideas from the outside world.