Robert Tamura

Income Convergence in an Endogenous Growth Model

An endogeneous growth model is developed that produces convergence in per capita income and growth rates of output. Agents have identical preferences and access to identical technologies of production and investment, but differing levels of initial human capital. A spillover effect of human capital in the investment technology provides below-average human capital agents with a higher rate of return on investment than above-average human capital agents. Thus below-average human capital agents grow faster than above-average human capital agents. This model explains income convergence of the developed world, regional income convergence within the United States, and intergenerational mobility.

Human Capital and Economic Development

This paper develops a general equilibrium model of fertility and human capital investment under uncertainty. Uncertainty exists in the form of a probability that a young adult does not survive to old age. Parents maximize expected utility arising from own consumption, their fertility, and the discounted utility of future generations. There exists a precautionary demand for children. Young adult mortality is negatively related to the average human capital of young adults. Therefore, rising human capital leads to falling mortality, which eventually induces a demographic transition and an acceleration in human capital investment. The model can fit data on world and country populations, per capita incomes, age at entry into the labor force, total fertility rates, life expectancy, conditional life expectancy, and infant mortality.

From decay to growth: A demographic transition to economic growth

Abstract Altruistic parents rationally choose fertility and human capital investments in their children. A rising rate of return to human capital investment and a conditional external effect in human capital investment produce: 1. (1) two development regimes, a Malthusian regime of high fertility and no human capital investment and a perpetual growth regime of low fertility and rising human capital 2. (2) conditional human capital convergence within regimes. 3. (3) a demographic transition to economic growth 4. (4) accelerating growth. As richer countries grow, the conditional external effect continually raises the rate of return on human capital and causes a demographic transition to economic growth by Malthusian countries.

Human capital and the switch from agriculture to industry

Abstract Endogenous technological change explains the transition from agriculture to industry. Initial production is agricultural. Human capital accumulation causes the economy to switch from agriculture to industry. The model explains slow growth in population and income before a switch to a balanced growth path of higher population growth and rapid income growth. Introducing a human capital externality in the total factor productivity of agriculture and industry allows for the reproduction of the previous outcomes and generates better per capita incomes in 200 and 3000 BC, the onset and duration of an agricultural revolution, time varying market size and modern income differentials.

Teachers, Growth, and Convergence

This paper examines the role of individual instruction and teacher quality in determining economic growth and convergence across school districts. The model shows that if teacher quality is more important for human capital accumulation than individual instruction, human capital convergence will occur between two school districts. This convergence arises because a poor school district hires relatively better teachers but uses them in larger classes in comparison with a rich school district. The model is estimated on panel data of the states of the United States from 1882 to 1990. The estimates indicate that teacher quality is relatively more important for human capital accumulation than individual instruction. The model accounts for all the mean growth in state per capita incomes and between 80 and 100 percent of convergence in state per capita incomes.

Fertility, human capital and the wealth of families

SummaryAn overlapping generations model with parental altruism is examined. The existence of the optimal value function in a model with an endogenous discount rate is proven. Two development regimes are produced: a high fertility, low income and no growth steady state, and a perpetual growth equilibrium with low fertility and rising income.

Efficient equilibrium convergence: Heterogeneity and growth

Abstract An endogenous growth model arising from task specialization is used to examine the effects of differing initial human capital distributions. Two macroeconomic phenomena are produced: income convergence and leapfrogging of living standards. Income convergence occurs for all countries in the same market, arising from diminishing returns to individual human capital. Leapfrogging occurs by comparing countries in two separate markets. Income leapfrogging can occur because the stationary growth rate increases with market size, and human capital heterogeneity reduces growth. The introduction of coordination costs of task assignment can produce gains in welfare and growth from human capital heterogeneity.

Fertility Decline, Baby Boom, and Economic Growth

We present new data on fertility, schooling, and child survival in fertility in the United States between 1800 and 2000. Over that period, fertility, childrens schooling, and child survival converged across states and regions. Falling child mortality, rising parental education, and increased population density are all associated with falling fertility and rising childrens schooling. Our data reveal two baby boom regimes. Regions that experienced large baby booms had smaller increases in child schooling, whereas regions that experienced small baby booms had larger increases. We parameterize a model that appears to fit well the broad trends in our data.

Do higher rents discourage fertility? Evidence from U.S. cities, 1940-2000

This paper documents the existence of a negative cross-sectional correlation between the price of living space as measured by rent per room and fertility using U.S. Census data over the period 1940-2000, the effect strengthening from 1940 to 1970 and weakening thereafter. The negative correlation does not merely reflect the tendency of larger families to locate within less-expensive areas of a given metropolitan area. Our study focuses on younger households, but analysis of completed fertility among older households reinforces the findings for younger households. Estimates for 36 CMSAs using the American Housing Survey, which permit us to construct persquare-foot measures of the price of living space, indicate that our findings are not merely an artifact of larger families occupying houses with more rooms. Durbin-Wu-Hausman tests reveal little evidence of endogeneity bias.

Does Opening a Stock Exchange Increase Economic Growth

We examine the connection between the creation of stock exchanges and economic growth with a new set of data on economic growth that spans a longer time period than generally available. We find that economic growth increases relative to the rest of the world after a stock exchange opens. Our evidence indicates that increased growth of productivity is the primary way that a stock exchange increases the growth rate of output, rather than an increase in the growth rate of physical capital. We also find that financial deepening is rapid before the creation of a stock exchange and slower subsequently.