The Economics of Fertility: A New Era

Abstract

In this survey, we argue that the economic analysis of fertility has entered a new era. Firstgeneration models of fertility choice were designed to account for two empirical regularities that, in the past, held both across countries and across families in a given country: a negative relationship between income and fertility, and another negative relationship between women's labor force participation and fertility. The economics of fertility has entered a new era because these stylized facts no longer universally hold. In high-income countries, the income-fertility relationship has flattened and in some cases reversed, and the cross-country relationship between women's labor force participation and fertility is now positive. We summarize these new facts and describe new models that are designed to address them. The common theme of these new theories is that they view factors that determine the compatibility of women's career and family goals as key drivers of fertility. We highlight four factors that facilitate combining a career with a family: family policy, cooperative fathers, favorable social norms, and flexible labor markets. We also review other recent developments in the literature, and we point out promising new directions for future research on the economics of fertility.

Measuring the effect of employment uncertainty on fertility in low-fertility contexts: an overview of existing measures

“…The theorised reason is that if women are outside of the labour market they have a lower opportunity cost to have a(nother) child. However, this relationship seems to have reversed across a variety of low-fertility contexts (Alderotti, 2022 ; Doepke et al, 2022 ; Schmitt, 2021 ; Yu & Sun, 2018 ). This change suggests that the income effect has become more important.…”

The more the merrier the wealthier? Multi-dimensional taxonomy of demography and development in Indonesia

“…Throughout the developing world, declining birth rates accompanied with rising living standards (measured by economic or welfare indicators) is the common pattern. The evidence from many previous studies (Sinding, 2009;Ashraf et al, 2013;Doepke and Kindermann, 2019;Doepke et al, 2022) clearly suggests that the interrelationship between reduced fertility and development represents a virtuous circle, whereby improvements in one reinforce and accelerate improvements in the other.…”

Beyond early motherhood: Trends and determinants of late fertility in Chile

“…Still, more recent literature suggests that even though early high-income countries' fertility patterns were very well explained by these models, it is not clear that these theories and associations explain actual patterns of fertility elsewhere. For example, the relationship between women's labour force participation and fertility across countries has reversed (Lesthaeghe, 2020) and even within countries, the relationship between women's education and their fertility is no longer always decreasing (Doepke et al, 2022).…”