The Economics of Fertility Decline

This assignment delves into the economics of fertility decline. Students are tasked with analyzing various theoretical frameworks and empirical studies that examine the relationship between economic factors like income, education, and social norms, and fertility decisions. Key concepts such as the demographic transition, Becker's model of fertility, and income distribution dynamics are central to this analysis. Students must critically evaluate these theories and research findings to understand the complex interplay between economics and population trends.

Running head: LITERATURE REVIEW
Literature Review
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction......................................................................................................................................2
Literature Review............................................................................................................................3
Income and Fertility: Malthusian View.......................................................................................3
The Demographic-Economic Paradox.........................................................................................4
Reason behind the inverse relationship between GDP and Birth Rate........................................5
Empirical Evidences....................................................................................................................7
Contradictory Findings................................................................................................................8
Fertility J-Curve...........................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
The development and well-being of a country depends on many attributes and factors,
both internal as well as external. One of the most important determinants of the dynamics of any
country, in a general framework, is the economic progress of the country and the activities taking
place in this domain. Many of the indicators of well being of the residents of the country depends
on the economic progress and distribution of the fruits of such progress among the population of
a country. One such important attribute, which roughly shows the overall condition of a country,
is the birth rate or the fertility of the population of the country. Fertility of the population of a
country has considerable implications on the welfare dynamics of a country as the same is linked
to many other attributes including the overall infrastructural framework, education and
employment status as well as income of the country, which is usually measured with the help of
the Gross Domestic Product of the country.
There exists huge speculations and theories regarding the linkage between the birth rate
of a country and the income of the country, in macro sense. The most popular theoretical
frameworks, which have been evolved over the years, suggest a presence of inverse relationship
between the above two variables. However, there are substantial arguments against this belief
also. Taking this debate regarding the presence of a relation between the income status of a
country and its fertility at the same point of time, the following section of the report incorporates
a detailed review of the literatures and scholarly works in this aspect.

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Literature Review
Over the years, the economists and speculators across the world have argued over the
relationship between the income level dynamics of a country and the changes in the birth rates of
the population of the same country. Many theories and counter theories have come forward
regarding this aspect. There exists considerable amount of literary evidences in this topic of
concern, some asserting the presence of the said linkage while some negating the arguments put
forward.
Income and Fertility: Malthusian View
One of the pioneering thinkers in this domain was Thomas Malthus. Malthus (1809),
more than two centuries ago, argued in his works, that income is one of the primary determining
factors of the fertility of the population of the country and the dynamics in the same. Malthus, in
his works, argued in favor of the presence of positive relationship between the income growth of
a country and the growth of the fertility statistics of the country. According to Malthus, with the
increase in the income of the nation, the overall income and well being of the population of the
concerned nation also increases. This in turn enables the population to produce more offspring as
they can afford to have more children, which in its turn contributes to the increased fertility rate
of the country. His views were supported by a considerable share of scholarly works during that
period, including the extensive essay on population dynamics by Malthus and Layton (1958),
which also theoretically argues in favor of the presence of a direct relationship between the
above discussed two variables.
Malthus, however, did not just stop at this speculation only. In his later works, Malthus
(1872), also suggests to emphasize on the effects and burdens of high population and higher
fertility rates on the nation, especially in the time of crisis like natural calamities and others. As

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he argues, the population of a country, in order to prevent the sufferings ensuing an economic or
natural turmoil, should impose a “moral restraint” on the number of children they are willing to
have. His views, along with considerable support from some other scholars of his time shows the
presence of the notion of the need for birth control for a higher social well being as early as in
the nineteenth century.
The theoretical assertions of Malthus, though seemed to be feasible in the then period,
however, as the domain of research increased and empirical evidences started to be taken into
account, a very interesting trend, entirely opposite to that of the above assertions was found to
exist in real case scenarios. This was termed by the scholars as the Demographic-Economic
Paradox, which is elaborated in the following sections, with the help of the literary evidences.
The Demographic-Economic Paradox
The scholars succeeding them countered the conventional views of Malthus and his
contemporaries. Chesnais (1992), being one of them, in his elaborate and empirically supported
paper, put forward an interesting pattern observed in the relationship between the income of a
country and its fertility. He, with the support of robust empirical evidences, shows the presence
of an inverse relationship between the income growth of a country and the changes in the fertility
rate of the same. The author argues that with time, as a nation moves in the path of economic
progress, with the overall income and standard of living of the residents of the country
continually increasing, the fertility of the population of the concerned country usually decreases.
He supports his assertions with empirical evidences, thereby contradicting the theory of positive
relationship between the income and fertility of the population of a country, as was proposed by
Malthus. His views found strong support by many other scholars in their works, one of the

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primary ones being Becker (1960), who also advocated in favor of the presence of a negative
correlation between the two variables, the correlation being bilateral according to him.
However, Chesnais only concentrates in showing the occurrence of a negative
relationship between the income growth and population’s fertility of a nation, in a generalized
framework. He does not venture in finding out the causes for the occurrence of such relationship
between the variables of concern. This gap was to a considerable extent filled by Perotti (1996).
Perotti, in his article tries to investigate the reasons lying behind the presence of an inverse
linkage between the birth rate and the GDP of most of the nations of the world, as was evident
from the empirical evidences across time and places.
Reason behind the inverse relationship between GDP and Birth Rate
According to Perotti, a country, with its economy in its initial low developed state is
characterized by attributes like low income, inferior living conditions, low standard of living and
overall inferior infrastructural facilities on part of the government of the country. This in turn
leads to the presence of lower health care facilities and life expectancies at birth. The death rate
of children and infants are also very high. This makes the population more concerned about the
survival of their successors, which in turn results in higher birth rates in the country. The author
argues that with the economic progress of the country and with the overall income of the nation
increasing, the general well-being and the standard of living of the overall population also
improves. This, clubbed with the improvement of the government infrastructure makes life easier
for the residents, which reflects in their assurance of a better and secured life. The life
expectancy of the population at birth also increases, which in turn reduce the number of children
people, want to have, thereby leading to a decreased overall fertility rate.

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The inverse relation between the fertility and the income level of a country, as has been
speculated by many scholars, has several other determining factors apart from what has been
suggested by the above author. Docquier (2004), supporting the arguments put forward by
Perotti, also adds some other factors supported by empirical evidences. According to the author
another very important factor which can justify the inverse relationship between the national
income of a country and the fertility of the same is the increase in the level of education and
awareness among the population with the economic progress of the country.
As argued by the author, with the increasing economic progress of a country, the overall
developmental aspects of the same increases. This on one hand improves the general
infrastructures of the country and on other hand increases the monetary advantages of the people
of the same country. An economically strong population strives for a better standard of living
and can also afford education for themselves. With increase in the growth of the country’s
economy, awareness generation also becomes widespread and the economy moves towards the
path of urbanization. This becomes even more prominent in the female population, who start
receiving education, general awareness and employment opportunities, which contributes to their
financial independence. These factors, collectively contribute towards the decrease in the
willingness to have more babies which thereby decreases the fertility of the population as a
whole. Stanford and Smith (2013) also points out the implications of religious factors and beliefs
on the income and fertility dynamics of the population of a country.
Jones, Schoonbroodt and Tertilt (2008), in their elaborate analytical paper, puts forward
the perceptions in the individualistic level, regarding the reasons behind the decrease in the
fertility of the population of the country with the increase in the overall national income of the

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country. According to the authors, there are roughly three broad reasons behind the presence of
such inverse relationship, which are as follows:
 As the authors suggest, with the increase in the income of a person due to growth in the
career prospects, there remains the chance of occurrence of a huge opportunity cost of
having new babies as the concerned individual has to let go his or her career
opportunities to a considerable extent. This, in the contemporary period, is especially true
for the female population of the country.
 The inverse relationship between the income and the fertility of a country at a particular
point of time, is highly attributed to the increasing education and employment prospects
of the female of the country. As the country economically progresses, the female
population gets more exposure in terms of education, skill development and employment.
This leads to their increased financial independence and changes in priorities. Females as
well as the males start preferring late marriages in order to settle in the work life first.
Increasing education and awareness generation also leads to implementation of different
birth control methods thereby resulting in a decline in the fertility of the country.
 Kravdal and Rindfuss (2008) also stresses on the implications of the perceptions of the
highly educated couples regarding parenting on the overall fertility rate of the countries.
According to the authors, the higher income and educated couples mostly prefer quality
parenting to more number of babies. With the notion of having less number of children
and of providing a quality life to them, these couples restrain themselves from having
more number of babies.

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Empirical Evidences
The above theories regarding the inverse the empirical evidences from several important
corners of the world have majorly supported relationship between the income and fertility rates
of a country. Kremer and Chen (2002), puts forward the real life examples in the international
framework, supporting the negative relationship between the two concerned variables. They put
forward the instance of the dynamics in fertility rates in Russia post the Revolutions of 1989.
The demographic profile changed in the country considerably at that point with higher fertility
among those who were more adversely affected by the labor market crisis than those who were
not affected that much. Another example of presence of the inverse relationship, as put forward
by the authors, was the instance of the increase in the per capita GDP in the Eastern Europe
(1990) which was found to be correlated with the decline in the birth rates and the postponement
of bearing child.
Contradictory Findings
The above discussed relationships, both positive as well as negative, has been challenged
by the contemporary data findings which show changes in the patterns of the correlations as well
with time across different countries. In his findings, England (2017), shows that in many cases
the relationship between the income levels and the fertility rates in the country went from
positive to negative and vice versa depending upon the time span considered. The author argued
that the patterns of the fertility with the changes in the income level of the countries alter from
short run to long run, depending upon the perceptional change and the infrastructural and
awareness generations in the country (Balbo et al. 2013). However, the authors do not emphasize
on the exact pattern of the changes in the relationship of the concerned variable. Luci-Greulich,
and Thévenon (2014) and some other scholars however, negates the notion of presence of any

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relationship between the dynamics of the two concerned variables, arguing that it varies with
regions, period taken into consideration and individual perceptions of the society.
Fertility J-Curve
The speculators have, extensively studied the relationship pattern of the concerned
variables with time, across the world. Furuoka (2013), in this context, has put forward the theory
of the Fertility J-Curve, which is one of the newest and most feasible theories existing in the
contemporary international framework, regarding the dynamics of the relationship between the
income level in the country and the fertility rates of the same. This has been supported by the
works of Anderson and Kohler (2015), who elaborates the implications of the Fertility J-Curve in
this context. The authors collectively suggest that the relationship between the two variables is
not a liner negative one. According to them, initially with the increase in the income level of the
population of a country, the fertility decreases as have been ascertained conventionally by many
authors and scholars. However, after a point of time the fertility again shows a positive relation
with the increase in the income of the economy, thereby showing a J-Shaped pattern.
Conclusion
From the above extensive review of the literatures, it is evident that there exists some
relationship between the income level of a country and its birth rates. However, there exist
different opinions regarding the pattern of the relationship and their dynamics with time. This,
therefore, leaves opportunities and chances of exploration for the future research prospects,
which can be taken, into account in the concerned research.

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References
Anderson, T. and Kohler, H.P., 2015. Low fertility, socioeconomic development, and gender
equity. Population and development review, 41(3), pp.381-407.
Balbo, N., Billari, F.C. and Mills, M., 2013. Fertility in advanced societies: A review of
research. European Journal of Population/Revue européenne de Démographie, 29(1), pp.1-38.
Becker, G.S., 1960. An economic analysis of fertility. In Demographic and economic change in
developed countries(pp. 209-240). Columbia University Press.
Chesnais, J.C., 1992. The demographic transition: Stages, patterns, and economic
implications. OUP Catalogue.
Docquier, F., 2004. Income Distribution, Non‐convexities and the Fertility–Income
Relationship. Economica, 71(282), pp.261-273.
England, P., 2017. Households, employment, and gender: A social, economic, and demographic
view. Routledge.
Furuoka, F., 2013. IS THERE A REVERSAL IN FERTILITY DECLINE? AN ECONOMIC
ANALYSIS OF THE" FERTILITY J-CURVE". Transformation in Business &
Economics, 12(2).
Jones, L.E., Schoonbroodt, A. and Tertilt, M., 2008. Fertility theories: can they explain the
negative fertility-income relationship? (No. w14266). National Bureau of Economic Research.

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Kravdal, Ø. and Rindfuss, R.R., 2008. Changing relationships between education and fertility: A
study of women and men born 1940 to 1964. American Sociological Review, 73(5), pp.854-873.
Kremer, M. and Chen, D.L., 2002. Income distribution dynamics with endogenous
fertility. Journal of Economic growth, 7(3), pp.227-258.
Luci-Greulich, A. and Thévenon, O., 2014. Does economic advancement ‘cause’a re-increase in
fertility? An empirical analysis for OECD countries (1960–2007). European Journal of
Population, 30(2), pp.187-221.
Malthus, T.R. and Layton, W., 1958. An essay on population(Vol. 2). Dent.
Malthus, T.R., 1809. An essay on the principle of population, as it affects the future improvement
of society (Vol. 2).
Malthus, T.R., 1872. An Essay on the Principle of Population Or a View of Its Past and Present
Effects on Human Happiness, an Inquiry Into Our Prospects Respecting the Future Removal Or
Mitigation of the Evils which it Occasions by Rev. TR Malthus. Reeves and Turner.
Perotti, R., 1996. Growth, income distribution, and democracy: What the data say. Journal of
Economic growth, 1(2), pp.149-187.
Stanford, J.B. and Smith, K.R., 2013. Marital fertility and income: moderating effects of the
Church of Jesus Christ of Latter-day Saints religion in Utah. Journal of biosocial science, 45(2),
pp.239-248.