Population Growth and Human Capital Investments: Theory and Evidence

This paper presents evidence from empirical studies that test hypotheses derived from models of household behavior pertaining to the interrelationships among population growth, human capital, and economic development. These studies have exploited quasi-natural experiments embodied in the cross-area variability in the wage rates of children in a number of low-income countries, the intercouple variation in the biological propensity to conceive, and the geographically selective introduction of new high-yielding seed varieties in India in the period 1961-71. The different varieties of evidence support the hypotheses that alterations in the returns to human capital associated with exogenous technical change lead simultaneously to increases in human capital investments and to reductions in fertility and that the costliness of fertility control is a significant but modest factor in inhibiting human capital investments.