Non-monotonicity of fertility in human capital accumulation and economic growth

This paper investigates the relationship between per capita human capital investment and the fertility rate. In the first part of the article we analyze a theoretical model with endogenous birth rate in which we do not make any assumption on how fertility directly affects per capita human capital accumulation. The results obtained in this model are then compared with those of a more traditional setting where the birth rate is exogenous and in which the direct effect of this variable on per capita human capital investment is monotonically negative, a rather standard assumption within the available theoretical literature. By using non-parametric techniques, we document the presence of a strong non-monotonicity in the total effect that fertility plays on human capital accumulation, and hence on economic growth. The non-monotonic effect of fertility on human capital appears to hold empirically for OECD, as well as non-OECD countries