Economic Geography, Endogenous Fertility, and Agglomeration

Author Name MORITA Tadashi  (Kindai University) /YAMAMOTO Kazuhiro  (Osaka University)
Creation Date/NO. July 2014 14-E-045
Research Project Spatial Economic Analysis on Regional Growth
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In this study, we construct an interregional trade model that includes endogenous fertility rates. The presented model shows that the agglomeration of manufacturing firms in a large region causes fertility rates to become lower than that in a small region. The agglomeration of firms in a region lowers the price of manufactured goods relative to child rearing costs, which reduces fertility rates.

We also find that a decrease in transportation costs results in the agglomeration of manufacturing firms, which lowers fertility rates in both large and small regions. We then extend our two-region model to a multi-region model and find that the number of manufacturing firms in larger regions is always greater than that in smaller regions. Therefore, fertility rates in larger regions are always lower than in smaller regions.