This chapter, titled "Human Capital, Fertility, and Economic Growth," by Gary S. Becker, Kevin M. Murphy, and Robert Tamura, explores the relationship between human capital, fertility, and economic growth. The authors argue that human capital, which includes knowledge and skills, is crucial for economic development. They critique both the Malthusian model, which links population and economic growth, and the neoclassical model, which ignores the link between population and the economy. Instead, they propose a model where investments in human capital are central, with rates of return on human capital increasing as the stock of human capital grows. The chapter discusses the evidence that supports the importance of human capital, such as the rapid growth in education investments in the United States between 1910 and 1950 and the positive correlation between education and subsequent economic growth. The authors introduce a model with endogenous fertility and rates of return on human capital that are independent of the stock of human capital. They show that multiple steady states exist, depending on the initial levels of human capital and technology, and that history and luck play critical roles in determining a country's growth trajectory. Key findings include: - Higher fertility discourages investments in both human and physical capital. - The demand for children decreases as the cost of raising them increases. - The rate of return on human capital rises initially but may eventually decline. - The model explains why countries with higher per capita incomes tend to have lower fertility rates. - The "brain drain" from less developed to developed countries is driven by the higher rates of return on human capital in developed countries. The chapter concludes by discussing the implications of these findings for economic policy and the role of luck and initial conditions in driving economic growth.This chapter, titled "Human Capital, Fertility, and Economic Growth," by Gary S. Becker, Kevin M. Murphy, and Robert Tamura, explores the relationship between human capital, fertility, and economic growth. The authors argue that human capital, which includes knowledge and skills, is crucial for economic development. They critique both the Malthusian model, which links population and economic growth, and the neoclassical model, which ignores the link between population and the economy. Instead, they propose a model where investments in human capital are central, with rates of return on human capital increasing as the stock of human capital grows. The chapter discusses the evidence that supports the importance of human capital, such as the rapid growth in education investments in the United States between 1910 and 1950 and the positive correlation between education and subsequent economic growth. The authors introduce a model with endogenous fertility and rates of return on human capital that are independent of the stock of human capital. They show that multiple steady states exist, depending on the initial levels of human capital and technology, and that history and luck play critical roles in determining a country's growth trajectory. Key findings include: - Higher fertility discourages investments in both human and physical capital. - The demand for children decreases as the cost of raising them increases. - The rate of return on human capital rises initially but may eventually decline. - The model explains why countries with higher per capita incomes tend to have lower fertility rates. - The "brain drain" from less developed to developed countries is driven by the higher rates of return on human capital in developed countries. The chapter concludes by discussing the implications of these findings for economic policy and the role of luck and initial conditions in driving economic growth.