Population growth and intergenerational mobility

ABSTRACT

Incorporating population growth into a simplified version of Maoz and Moav (1999), this article analyzes the effect on the relationship between intergenerational mobility and economic development. If the fertility is the same across income groups, population growth does not influence the basic dynamics of the economy. With, however, the fertility difference, population growth plays a crucial role in characterizing the intergenerational mobility. Suppose, in particular, that the fertility of the educated is higher than that of the uneducated. Then the share of the educated increases sharply due to the fertility difference. This sharp increase largely raises the average wage in the economy, which in turn boosts the education cost. The large increase in the education cost facilitates downwards mobility, and hence decreases the population share of the educated. Thus, if the fertility difference is large enough, the mobility exhibits cyclical behaviour. In contrast, if the fertility of the uneducated is higher than or equal to that of the educated, the same dynamics as in Maoz and Moav (1999) appears.

KEYWORDS:

• Population growth
• intergenerational mobility
• economic development

JEL CLASSIFICATION:

• I22
• J13
• J62

Acknowledgments

The authors would like to thank Keiya Minamimura, Masaya Shintani, Mitsuru Ueshina and Daishin Yasui for valuable comments. The second author gratefully acknowledges the financial support of Grants-in-Aid for Scientific Research from the Japan Society for the Promotion of Science (17K18564 and 18K01569). The usual disclaimer applies.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the Japan Society for the Promotion of Science [17K18564, 18K01569].