FERTILITY AND WAGE RATES IN AN OVERLAPPING-GENERATIONS MODEL

Two conflicting conclusions exist about the relationship between ferti lity and wage rates in steady-state equilibria in the literature. Whil e Malthus and others predict a positive relation, Barro and Becker fin d a negative relation. Using several specifications of utility functio ns, this paper shows that whether bequests are operative or non-operat ive plays a critical role in determining the relation. Specifically, i t is shown that fertility and wage rates are negatively related when b equests are operative; and given some plausible restrictions, they are positively related when bequests are non-operative.