Growth and Inequality: A Demographic Explanation

This paper investigates the relationship between growth and inequality from a demographicpoint of view. In an extended model of the accidental bequest with endogenous fertility, weanalyze the effects of a decrease in the old-age mortality rate on the equilibrium growth rateas well as on the income distribution. We show that the relationship between growth andinequality is at first positive and then may be negative in the process of population aging. Theresults are consistent with the empirical evidence in some developed countries.