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Fertility and Savings in the United States: 1830-1900
Frank D. Lewis
Journal of Political Economy
Vol. 91, No. 5 (Oct., 1983), pp. 825-840
Published by: The University of Chicago Press
Stable URL: http://www.jstor.org/stable/1837371
Page Count: 16
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A long tradition in the development literature has been to associate the aggregate savings rate with the dependency ratio, the ratio of dependent children to adults. In this paper I formalize the relationship by developing a life-cycle model in which offspring are assets from the viewpoint of their parents. The model is used to help explain the increase in nineteenth-century U.S. savings rates. I find that between 1830 and 1900 about one-quarter of the 6-percentage-point rise in the savings rate can be attributed to a decline in the dependency rate.
Journal of Political Economy © 1983 The University of Chicago Press