Hiroshi Goto, Keiya Minamimura
To explain the links between demographics and economic integration, we construct a New Economic Geography model with endogenous fertility. Labor mobility across regions results in more people flowing into highly populated regions, but lowers fertility rates there. Finally, regions are divided into one very large region with a higher real wage and another small region with lower real wage, higher fertility rate, and a supply of workers to the large region. The population growth path resembles a logistic curve in the early phase, but population decreases in the last phase. Economic integration leads to population concentration and decreases population size.
