{Reference Type}: Journal Article
{Title}: Banking on fewer children: financial intermediation, fertility and economic development.
{Author}: Lehr CS;
{Journal}: J Popul Econ
{Volume}: 12
{Issue}: 4
{Year}: 1999
{Factor}: 4.7
{DOI}: 10.1007/s001480050114
{Abstract}: This study examines the influence of financial intermediation on fertility rate and labor allocation decisions.  A panel Vector Autoregression model using three variables of interest, specifically, financial intermediation, fertility, and industrial employment data in 87 countries, was estimated.  This convenient methodology allows the relationship between the variables to change over time.  Findings indicate that the increase in wages led some households to shift from traditional labor intensive methods of production to modern sector firms.  Since it is optimal for households in the modern sector to have fewer children then the labor allocation decision leads to a lower national fertility. Furthermore, results imply that the emergence and development of the financial intermediation sector will enhance modern sector employment and lower total fertility rates.  Thus, the financial intermediation process is an important part of the overall developmental process.