DP6493 ?The Child is Father of the Man:? Implications for the Demographic Transition

Author(s): David de la Croix, Omar Licandro
Publication Date: September 2007
Keyword(s): Fertility, Height, Human Capital, Life Expectancy, Mortality.
JEL(s): I12, I20, J11, J24, N30
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=6493

We propose a new theory of the demographic transition based on the evidence that body development during childhood is an important predictor of adult life expectancy. Fertility, childhood development, longevity, education and income growth all result from individual decisions. Parents face a trade-off between the number of children they have and the spending they can afford on each of them in childhood. These childhood development spending will determine children longevity when adults. It is in this sense that we refer to Wordsworth?s aphorism that "The Child is Father of the Man." Parents face a second trade-off in allocating their time between increasing their own human capital and rearing children. The model displays different regimes. In a Malthusian regime with no education fertility increases with adult life expectancy. In the modern growth regime, life expectancy and fertility move in opposite directions. The dynamics display the key features of the demographic transition, including the hump in both population growth and fertility, and replicate the observed rise in educational attainment, adult life expectancy and economic growth. Consistent with the empirical evidence, a distinctive implication of our theory is that improvements in childhood development precede the increase in education.