ABSTRACT

Recent data from US states reveal a negative correlation between environmental degradation and environmental concerns, which in turn seem inversely linked to fertility rates. We introduce a dynamic model to examine explicitly this interplay and explain the observed positive correlation between the carbon intensity of the economy and fertility in data from US states. The key ingredient of our model is that preferences for the number of children and environmental concerns may be complementary or substitutable. Interesting results occur when environmental concerns and the number of children are substitutable. At a stable steady state, a stronger effect of environmental concerns on household preferences reduces the number of children, as stressed by recent literature. The dynamics show that lower fertility rates are associated with lower environmental impacts from economic production, such as reduced carbon intensity.