Discussion Paper No.2405

Abstract :
This paper presents an analysis of long-term effects of intergenerational transmission of fertility behavior as a proxy of culture in an overlapping generations setting. We assume that the fertility norm faced by a generation derives from the preceding generation’s fertility behavior, as reflected in the number of siblings. The norm costs can be represented as the disutility from deviating from the norms. Fertility rate norms engender demographic transitions which converge to a long-term equilibrium fertility rate, whereas the norms affect only fertility transitions. It is noteworthy that, starting from a high fertility rate and low per-worker capital, the GDP growth rate transition can display an inverted U shape along the monotonic fertility transition. Because the long-term fertility rate coincides with the non-norms equilibrium, the child policy must be such that it can positively affect the long-term non-norm fertility rate.

JEL Classification: I30, J11, J13, O40
Keywords: fertility decisions, intergenerational transmission of preference for children, social norms