Abstract
This article analyses a Stackelberg differential game in which households' labour supply and fertility decisions are taken assuming husbands as leaders and wives as followers. The model solution yields the optimal number of children and labour supply of male and female. In equilibrium male and female labour supply increases with wage and decreases with children costs and time preference, and the optimal number of children increases with male wage and decreases with cost of children, husband's time preference, and female's wage and time preference. We test the model using Ghana Living Standard Survey Round 4 and find that women are more sensitive to changes in the labour market conditions than males, and better labour market opportunities for women may lead to a strong reduction in fertility.
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