Fertility, Human Capital, and Macroeconomic Performance: Long-Term Interactions and Short-Run Dynamics

Literature suggests that a fruitful inquiry into the fertility/ economic development nexus should focus not on whether these two variables are correlated over time or across countries. The emphasis should instead be on the pattern of directional causality between them. Thus, simple statistical associations in most previous studies in this area are inadequate to identify the cause-and-effect relationship between population size and economic growth. Consequently, a central objective of this empirical paper is to take a fresh look at the casual link between fertility and economic growth. Moreover, our paper aspires to make two additional contributions. First, in studying the relation between fertility and economic development, it seems that the dimension of human capital (educational attainment) should not be ignored. Established theoretical reasoning suggests that human capital influences demography as well as economic growth.