2020 Volume 23 Pages 218-234
It has been found that population decline may change the properties of growth paths from those in a population-increasing economy in the Solow and semi-endogenous growth models. However, the rates of population decline for such dynamics seem too large given the available empirical data. We show that positive capital-input externalities can reduce such rates of population decline to empirically relevant levels in a semi-endogenous growth model, while the introduction of child rearing costs could play a similar role in the Solow model. The economic implications of child rearing costs are discussed for the Solow growth model with population decline.
JEL Classification: J11; O11; O47
