Demographic and Economic Consequences of the Post-war Mortality Decline in Developing Countries

Since World War II, mortality has decreased in the developing world. This paper explores the effects of this mortality fall on economic and demographic growth by a family-optimization model, in which fertility is endogenous and relative wealth yields utility because of status-seeking. The main findings are that the increased life expectancy generates an income stream which promotes fertility, but that the desire for status hampers fertility and warrants economic growth by preventing capital-diluting demographic expansion. If status-seeking is strong, population growth decreases below its original level in the long run but in the short run, population growth may overshoot.