Trade and productivity: The family connection redux

We investigate the effects of human capital accumulation and declining fertility on international trade by integrating a micro-founded education and fertility decision of households into a model of trade with firm heterogeneity. The theory implies that the export share of a country increases with the education level of its population and decreases with fertility. These implications explain the empirically observable relations between the birth rate, eduction, and the export share in OECD countries from 1960 to 2010.