Demographic transition, income distribution, and economic growth

Momi Dahan*, Daniel Tsiddon

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

112 Scopus citations

Abstract

This article investigates the dynamic interactions among demographic transition, income distribution, and economic growth. Consistent with empirical evidence we show that fertility and income distribution follow an inverted U-shaped dynamics in the process of economic development. In the first stage fertility increases and income inequality widens, whereas in the second stage fertility declines, income becomes more equally distributed, human capital becomes more abundant, and growth of income per capita takes off. The model therefore generates the documented facts about epochs of demographic transition, relying neither on arguments based on "near rationality" nor on noneconomic objectives.

Original languageAmerican English
Pages (from-to)29-52
Number of pages24
JournalJournal of Economic Growth
Volume3
Issue number1
DOIs
StatePublished - 1998
Externally publishedYes

Keywords

  • Demographic transition
  • Economic growth
  • Human capital
  • Income distribution

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