An Economic Growth Model with Endogenous Birth and Mortality Rates

Chapter 10 considers an economic dynamics with coexistence of multiple races. Different races have different habits, customs, and attitudes to family and having children. Even if a society was fair and there was no racial discrimination, it is reasonable to consider that the cultural differences may result in differences in wealth, income, and population. In order to explain consequences of racial differences in values and human capital, this chapter deals with dynamic interdependence between different races’ birth rates, mortality rates, populations, wealth accumulation, and time distributions between work, leisure, and children caring. It emphasizes the role of human capital, technological, and preference changes on the birth and mortality rates and time distributions. The basic economic structure is based on the Walrasian general equilibrium theory, and wealth accumulation is based on the Solow growth model. The wealth and income inequality are due to heterogeneity in households’ preferences and human capital levels as well as the households’ initial wealth. I also model gender differences in human capital, the propensity to use leisure time, and children caring efficiency. This chapter introduces the basic model with wealth accumulation and population dynamics and examines the dynamics of the system and its properties. It shows the effects of changes in the human capital of race 1’s women, race 1’s mother spending time on per-child fostering, the total factor productivity, the propensity to have children, race 1’s income with a stronger impact on the mortality rate, woman’s propensity to pursue leisure activities, and race 1’s propensity to save on the economic system.