Impact of differential fertility on per capita income and birth control policies

Abstract

A disaggregated Markovian population growth model is presented, incorporating the differences in the population growth rates across different income classes. Each income class is characterized by (a) the income generating capacity of adults and (b) the maintenance cost of raising a child to become an income-generating adult. Lower birth rates for the rich and higher birth rates for the poor only increase per capita income in the short run, but results to a low per capita income in the long run. The increasing gap between rich and poor, and the increase in number of the poor and decrease in number of the rich are also observed. Our model indicates that income inequality and differential birth rates are important aspects that should be considered in making economic policies regarding population control.