The next ISEG Research seminar will be attended by Derick Almeida, from Universidade de Coimbra, who will present a paper entitled 'Fertility choices, Demographics and Automation“.
The seminra will take place on the 2nd October, from 13.00 to 14.00, in Lecture Theatre 3 (Quelhas, 4th Floor).
Free admission.
Abstract:
In this paper we study a theoretical link between the effects of increased automation on labor markets, and the fertility decisions of a representative household that is replaced by robots in the production of tasks. We develop a framework in which children provide utility and impose an opportunity cost to the household due to lost labor income. We show that fertility rate changes are the result of an optimal response to wage variations after the economy is hit by a shock that increases the design quality of robots used in production. Using this model, we characterize an initial equilibrium and simulate the effect of a 10% increase in robot productivity on important endogenous variables, including wages, and find that, in the absence of fixed costs to raising children, the fertility rate increases by approximately 3.4%.