| This thesis explores the role of life expectancy as a determinant of educational attainment and fertility, both during the demographic transition and after its completion. Two main points distinguish our analysis from the previous ones. First, we introduce investments of adult individuals in their own education, which determines productivity in both the goods and household sectors. Second, adult longevity affects the way parents value each individual child. Increases in adult longevity or reductions in child mortality eventually raise the investments in adult education. Together with the higher utility derived from each child, this tilts the quantity-quality trade off towards less and better educated children, and increases the growth rate of the economy. This setup can explain both the demographic transition and the recent behavior of fertility, ignored by the previous literature and incompatible with most of its results. Evidence from historical experiences of demographic transition is presented to support the assumptions of the model. Specific predictions are testes using two data sets: a cross-country panel and individual level data from the Brazilian Demographic and Health Survey. The empirical evidence supports the predictions of the model: gains in life expectancy tend to reduce fertility, increase educational attainment, and increase the growth rate of the economy. |
