Contraception and Development: A Unified Growth Theory

This study investigates the interaction of the use of modern contraceptives, fertility, education, and long-run growth. It develops an economic model that takes into account that sexual intercourse is utility enhancing and that birth control by modern contraceptives is more efficient and more costly than traditional methods. The study shows how a traditional economy, in which modern contraceptives are not used and fertility is high, gradually converges towards a high growth regime, in which couples use modern contraceptives. Innovations in contraceptive technology at later points in time speed up the fertility transition and the convergence to steady growth. Utility enhancing sexual intercourse provides a “natural” explanation for why net fertility decreases with income. Lower prices or higher efficacy of contraceptives are conducive to an earlier onset of the fertility transition and a quicker convergence but do not effect economic performance (nor sexual intercourse) at the steady state.