Environmental problems and economic development in an endogenous fertility model

Research, Preprint OPEN
Frank Joest ; Martin Quaas ; Johannes Schiller (2006)
  • Publisher: Heidelberg: University of Heidelberg, Department of Economics
  • Subject: endogenous fertility | Familienökonomik | sustainability | Wachstumstheorie | Bevölkerungsökonomik | J18 | O13 | Umweltpolitik | sustainability, endogenous fertility, externalities | externalities | Q25 | Umweltbelastung | Umweltökonomik | Neoklassisches Wachstumsmodell | Theorie
    • jel: jel:Q25 | jel:J18 | jel:O13
      ddc: ddc:330

Population growth is often viewed as a most oppressive global problem with respect to environmental deterioration, but the relationships between population development, economic dynamics and environmental pollution are complex due to various feedback mechanisms. We analyze society’s economic decisions on birth rates, investment into human and physical capital, and polluting emissions within an optimal control model of the coupled demographic-economic-environmental system. We show that a long-run steady state is optimal that is characterized by a stable pollution stock, and by population and economic growth rates depending on the possibilities of emission abatement and technical progress due to human capital accumulation. We derive a condition on the production technologies and opportunity costs of raising children, under which the optimal birth rate is constant even during the transition to a steady state. In particular in an economy where only human capital is needed to produce output, the optimal choice of the birth rate is not affected by the states of the economy or the environment. In such a setting, the optimal birth rate is constant and policy should concentrate on intertemporal adjustment of per-capita emissions.
  • References (29)
    29 references, page 1 of 3

    Arrow, K. and M. Kurz (1970). 'Public Investment, The Rate of Return, and Optimal Fiscal Policy', Published for Resources for the Future, John Hopkins Press, Baltimore.

    Barro, R.J. and X. Sala-I-Martin (1995). 'Economic Growth', McGraw-Hill, New York.

    Becker, G.S. and R.J. Barro (1988). 'A Reformulation of the Economic Theory of Fertility', Quarterly Journal of Economics, 103(1):1-25.

    Becker, G.S., E.S. Glaeser, and K.M. Murphy (1999). 'Population and Economic Growth, AEA Papers and Proceedings, 89(2):145-149.

    Chu, C. Y. C. and R. R. Yu (2002). 'Population Dynamics and the Decline in Biodiversity: A Survey of the Literature', Population and Development Review, 28(0):126- 143.

    Dasgupta, P. and G. M. Heal (1979). Economic Theory and Exhaustible Resources, Cambridge University Press, Cambridge.

    Dasgupta, P. (1993). An Inquiry into Well-Being and Destitution, Clarendon Press, Oxford.

    Dasgupta, P. (2000). 'Population and Resources: An Exploration of Reproductive and Environmental Externalities', Population and Development Review, 26(4):643-689.

    Ehrlich, P.R. and A.E. Ehrlich (1990). 'The Population Explosion', New York.

    Galor, O. and D.N. Weil (2000). 'Population, Technology, and Growth: From Malthusian Stagnation to the Demography Transition and Beyond', American Economic Review, 90(4):806-828.

  • Metrics
    No metrics available
Share - Bookmark