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Schooling. This study estimates the respective contributions of schooling and income in determining the fertility transition within the US states between 1840 and 1980. While evidence suggests that both relationships are negative and statistically signi…cant, the most robust determinant of the transition is the development of human capital as measured by years of schooling. This empirical fact corroborates the use of the quantity-quality trade-off mechanism in theoretical models to generate the transition from economic stagnation to growth.

The long run welfare implications of the legal retirement age are studied in a perfect foresight overlapping-generations model where agents live for two periods. Agents’ lifetime is divided between working life and retirement by a legal retirement age controlled by the government whereas agents, besides savings, control the intensive margin or "yearly" labour supply. The legal retirement age is utilized to dampen distortionary effects of payroll taxes and public pension annuities and promote capital accumulation. We show that a social optimal legal retirement age exists and how it depends on whether payroll taxes or benefit annuities ensures budget balance of the PAYG pension system.