Economic Growth, Gender Wage Gap and Fertility Rebound

Abstract

Fertility and per capita income are now positively associated across most high income OECD countries. Low fertility and a gender wage gap persist in Japan. This paper presents a model where endogenous increases in the price of child-care and gender equity in the allocation of capital play important roles in the effect of per capita income growth and rising female relative wages on fertility. Results indicate that a positive relationship between fertility and per capita income is not robust: overall fertility rises with female relative wages if child-care productivity is sufficiently high; female relative wages may not rise with per capita income if men work with increasing capital relative to women.