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An Intergenerational Model of Population Growth

2016; American Economic Association; Volume: 65; Issue: 5 Linguagem: Inglês

1944-7981

Assaf Razin, Uri Ben‐Zion,

Economic theories and models

The problem of population growth has been only partially formulated in an intertemporal context. Therefore, a link between population theory and economic growth theory is still missing.' This paper attempts to provide such a link by analyzing an intergenerational model of optimum population growth. The model accommodates the idea that decisions on increases in population should consider the new population's quality of life. This concept is elaborated upon in a static framework by Gary Becker and Gregg Lewis, Dennis De Tray and Robert Willis. Other literature on population growth, such as Harold Votey, disregards this consideration altogether.2 More explicitly, this paper assumes that the utility of each generation is a function of the level of its consumption and the number and utility of the newly born people. We are thus led to consider the utility of an infinite number of generations. This model differs from Paul Samuelson,s intergenerational model of pure consumption in which the utility of each generation depends only on that generation's own consumption. Recently, Philip Neher (1971) analyzed a model of fertility in primitive economies; it is based on the assumption that parents use children as investments to insure future consumption needs. Neher's analysis focuses entirely on the pension motive for having children;3 our model assumes that fertility is determined so as to balance the parents' welfare derived from additional children against that derived from the children's quality of life. We first outline a general model of optimum population growth. In order to discuss explicitly various economic aspects of population, we use a simple case in the analysis. Section I sets up the basic model.