THE GENDER-GAP, FERTILITY, AND GROWTH

This paper examines a novel mechanism linking fertility and growth. Th ere are three components to the model: first, increases in capital per worker raise women's relative wages, since capital is more complement ary to women's labor input than to men's. Second, increasing women's r elative wages reduces fertility by raising the cost of children more t han household income. And third, lower fertility mises the level of ca pital per worker. This positive feedback loop generates a demographic transition. a rapid decline in fertility accompanied by accelerated ou tput growth.