2007
DOI: 10.1007/s00148-007-0144-9
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Population growth overshooting and trade in developing countries

Abstract: This paper examines a developing economy by a family-optimization model in which the number of children is a normal good in preferences. Trade liberalization generates two effects: an income effect, which raises population growth in the short run; and a gender wage effect, which decreases that in the long run. With higher income, families invest more in capital. Because female labor is more complementary to capital, a higher level of investment increases women's relative wages and attracts more of them from ch… Show more

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Cited by 13 publications
(5 citation statements)
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“…Studies show that trade liberalization initially increases population growth due to increased income, but eventually decreases it as higher investment in capital raises women's wages, shifting them from child-rearing to production. Thus, the relationship between population growth and international trade is initially positive but becomes negative in the long run (Lehmijoki and Palokangas, 2009). Study by Galor and Mountford in 2008 suggests that international trade has a differential effect on population growth in developed and less developed countries.…”
Section: Literature Reviewmentioning
confidence: 99%
See 1 more Smart Citation
“…Studies show that trade liberalization initially increases population growth due to increased income, but eventually decreases it as higher investment in capital raises women's wages, shifting them from child-rearing to production. Thus, the relationship between population growth and international trade is initially positive but becomes negative in the long run (Lehmijoki and Palokangas, 2009). Study by Galor and Mountford in 2008 suggests that international trade has a differential effect on population growth in developed and less developed countries.…”
Section: Literature Reviewmentioning
confidence: 99%
“…Bangladesh, holding all other variables constant. Population growth rates can significantly influence a country's labor supply, consumption patterns, resource availability, and infrastructure requirements, all of which are critical determinants of trade volume (Mountford, 2008;Lehmijoki and Palokangas, 2009). In Bangladesh, where rapid population growth can strain resources, infrastructure, and social services, higher population growth rates may lead to increased production costs, environmental pressures, and urban congestion, thereby limiting the country's trade capacity and competitiveness.…”
Section: Hypothesis (H5): Increased Government Expenditure Positively...mentioning
confidence: 99%
“…Thus, trade will lead to a decline in fertility. Lehmijoki and Palokangas's (2009) model emphasizes that opening trade increases income levels and reduces the gender wage gap. The increase in men's income levels will increase the fertility rate in the short term, while the rise in women's relative wages-stemming from the improvement in human capital investment brought about by the increase in primary family income-will reduce the fertility rate in the long term.…”
Section: Literature Review and Theoretical Assumptionsmentioning
confidence: 99%
“…The trading-pair intercepts subsume distances. On the other hand, Lehmijoki and Palokangas (2009) used a family-optimisation population growth model in which the number of children is a normal good. They found that trade liberalisation generates income, raising population growth in the short run, and decreasing the gender wage gap in the long run.…”
Section: Economic Growth and International Tradementioning
confidence: 99%