Skip to main content

Toward a general analysis of endogenous Easterlin cycles

Abstract

Easterlin believed that there were two features associated with the birth cycles he observed: the cycles were related to the labor market, and they might be self-generating. This paper tries to set up a model that contains both of these two features. We suppose that the welfare of various age-specific cohorts are determined by their respective marginal productivity, and that the underlying technology which puts together labor force of various age-specific cohorts can be characterized by a general production function. Under these weak assumptions, we show that the well-analyzed cohort and period models along the lines of Lee (1974) are restricted versions of our general setting. Given that both the cohort model and the period model were rejected by statistical tests, we adopt the coefficient values obtained from the estimation of the unrestricted version to perform the bifurcation analysis. We go beyond the previous study which focused upon the possible existence of limit cycles, and show that the U. S. fertility limit cycle solution is unstable. Therefore the population trajectory will never converge to that limit cycle.

This is a preview of subscription content, access via your institution.

References

  • Berger MC (1983) Changes in labor force composition and male earnings: A production approach. J Human Resources 17:177–196

    Google Scholar 

  • Berndt ER (1991) The practice of econometrics: Classic and contemporary. Addison-Wesley, New York

    Google Scholar 

  • Chesnais J-C (1992) The demographic transition: Stages, patterns, and economic implications. Oxford University Press, Oxford

    Google Scholar 

  • Chu CYC (1990) An existence theorem on the stationary state of income distribution and population growth. Int Econ Rev 31:171–185

    Article  Google Scholar 

  • Chu CYC, Koo H-W (1990) Intergenerational income-group mobility and differential fertility. Am Econ Rev 80:1125–1138

    Google Scholar 

  • Connelly R (1986) A framework for analyzing the impact of cohort size on education and labor earning. J Human Resources 21:543–562

    Google Scholar 

  • Cowgill DO (1949) The theory of population growth cycles. Am J Sociol 55:163–170

    Google Scholar 

  • Cushing JM (1978) Nontrivial periodic solutions of some Volterra integral equations (Lect Notes Math, vol 737, pp 50–66). Springer, Berlin Heidelberg New York

    Google Scholar 

  • Davison R, MacKinnon JG (1993) Estimation and inference in econometrics. Oxford University Press, New York

    Google Scholar 

  • Day RH, Kim K-H, Macunovich D (1989) Complex demoeconomic dynamics. J Popul Econ 2:139–159

    Google Scholar 

  • Diewert WE (1974) Applications of duality theory. In: Intriligator M, Kendrick D (eds) Frontiers of quantitative economics, vol 2. North-Holland, Amsterdam

    Google Scholar 

  • Easterlin RA (1961) The American baby boom in historical perspective. Am Econ Rev 51:860–911

    Google Scholar 

  • Easterlin RA (1980) Birth and fortune, 2nd edn. University of Chicago Press, Chicago

    Google Scholar 

  • Feichtinger G, Dockner EJ (1990) Capital accumulation, endogenous population growth, and Easterlin cycles. J Popul Econ 3:73–87

    Google Scholar 

  • Feichtinger G, Sorger G (1989) Self-generated fertility waves in a non-linear continuous overlapping generations model. J Popul Econ 2:267–280

    Google Scholar 

  • Frauenthal JC (1975) A dynamical model for human population growth. Theoret Popul Biol 8:64–73

    Google Scholar 

  • Frauenthal JC, Swick KE (1983) Limit cycle oscillations of the human population. Demography 20:285–298

    Google Scholar 

  • Freeman R (1979) The effect of demographic factors on age-earnings profiles. J Human Resources 14:289–318

    Google Scholar 

  • Golubitsky M, Schaeffer DG (1985) Singularities and groups in bifurcation theory, vol I. Springer, Berlin Heidelberg New York

    Google Scholar 

  • Judge GG et al (1988) Introduction to the theory and practice of econometrics, 2nd edn. John Wiley & Sons, New York

    Google Scholar 

  • Keyfitz N (1972) Population waves. In: Greville THE (ed) Population dynamics. Academic Press, New York

    Google Scholar 

  • Lau LJ (1986) Functional forms in econometric model building. In: Griliches Z, Intriligator MD (s) Handbook of econometrics, vol 3. North-Holland, Amsterdam

    Google Scholar 

  • Lee RD (1974) The formal dynamics of controlled populations and the echo, the, boom and the bust. Demography 11:563–585

    Article  Google Scholar 

  • Lee RD (1975) Natural fertility, population cycles and the spectral analysis of births and marriages. J Am Statist Assoc 70:295–304

    Google Scholar 

  • Lee RD (1976) Demographic forecasting and the Easterlin hypothesis. Popul Dev Rev 2:459–468

    Google Scholar 

  • Lee RD (1978) Causes and consequences of age structure fluctuations: The Easterlin hypothesis. Proceedings of Conference on Economic and Demographic Change, Issues for the 1980s held at Helsinki 1:405–418

    Google Scholar 

  • Lee RD (1987) Population dynamics of humans and other animals. Demography 24:443–465

    Google Scholar 

  • Lorenz HW (1989) Nonlinear dynamical economics and chaotic motion. Springer, Berlin Heidelberg New York

    Google Scholar 

  • Pesaran MH, Deaton AS (1978) Testing non-nested nonlinear regression models. Econometrica 46:677–694

    CAS  PubMed  Google Scholar 

  • Samuelson P (1976) An economist's non-linear model of self-generated fertility waves. Popul Studies 30:243–248

    Google Scholar 

  • Swick KE (1981 a) Stability and bifurcation in age-dependent population dynamics. Theoret Popul Biol 40:80–100

    Google Scholar 

  • Swick KE (1981 b) A nonlinear model for human population dynamics. SIAM J Appl Math 40:266–278

    Google Scholar 

  • Taljapurkar S (1987) Cycles in nonlinear age-structured models I: Renewal equations. Theoret Popul Biol 32:26–41

    Google Scholar 

  • Varian HR (1984) Microeconomic analysis, 2nd edn. Norton, New York

    Google Scholar 

  • Wachter KW (1991) Elusive cycles: Are there dynamically possible Lee-Easterlin models for U.S. births? Popul Studies 45:109–135

    Google Scholar 

  • Wachter KW, Lee RD (1989) U.S. birth and limit cycle models. Demography 26:99–115

    Google Scholar 

  • Ward MD, Buth WP (1980) Completed fertility and its timing. J Polit Econ 88:917–940

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Additional information

We thank Professors Kenneth Wachter, Shripad Tuljapurkar, and two anonymous referees for their valuable help, comments and suggestions.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Cyrus Chu, C.Y., Lu, HC. Toward a general analysis of endogenous Easterlin cycles. J Popul Econ 8, 35–57 (1995). https://doi.org/10.1007/BF00172037

Download citation

  • Received:

  • Accepted:

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF00172037

Keywords

  • Labor Market
  • General Production
  • General Setting
  • Labor Force
  • Production Function