Economic geography, fertility and migration

This paper analyzes the relationship among economic geography, fertility and migration. The empirical evidence presented reveals that persistent regional variations in fertility exist within a country and that regional total fertility rates are negatively related to regional population density. A two-period overlapping generations model of endogenous fertility, incorporating n-regions, agglomeration economies, and congestion diseconomies is constructed to explain this negative relationship. While agglomeration economies have both positive income and negative substitution effects on fertility, congestion diseconomies have a negative income effect on it. Combined with the mobility of people, interaction among these effects generates the negative relationship as a steady-state equilibrium outcome. It is also shown that net migration from regions with lower population density to regions with higher population density occurs in an equilibrium, which, in turn, maintains the regional variations in fertility.