Macroeconomic Models of the Family: Positive and Normative Analysis of Fertility Choice in Dynamic Settings

ABSTRACT

Prop ID: SES-0452473

P I: Jones, Larry E.

Organization: University of Minnesota-Twin Cities

Title: Macroeconomic Models of the Family: Positive and Normative Analysis of Fertility Choice in Dynamic Settings

This research focuses on dynamic models of family decision-making and their quantitative properties. Three of the most important features of this type of decision-making are: designing joint labor supply decisions of couples, determining the number of children to have (and their timing) and the education of these children. This research follows others in the use of modern, dynamic, general equilibrium techniques to study how these decisions are made. Both fertility and education decisions are forward looking choices by their nature. This makes the application of this set of tools to these questions particularly appropriate. The research involves both qualitative and quantitative aspects and, as such, the tools developed will be useful in a variety of other studies as well. Since part of the emphasis is on building quantitative models, historical data can be used to check the validity of the modeling assumptions. For example, do the models built and the techniques for solving them developed provide an accurate description of the long term trends that are seen in the data on family labor supply and fertility?

Broader Impact of the Project:

There are two elements of the research that will be particularly useful for the broader scientific community. First, since this project builds quantitative, general equilibrium models of fertility decisions and compares the results with the data from time series in the US and other countries, the resulting models can be used by historians and demographers to help forecast the time paths of population in developing countries. The methodology is such that it will allow future researchers to determine how this time path will change in response to future events such as improvements in health and the introduction of social security systems. Second, since this project also extends the standard notions of modern Welfare Economics to environments in which population size is endogenous, the tools will be a useful addition to the debate on population control.