Can They Explain the Negative Fertility-Income Relationship?
This chapter explains the observed negative relationship between income and fertility within a standard utility maximizing economic model. The observation that richer populations have lower fertility has been repeatedly made, whether the evidence is across countries or within countries. Richer people buy more houses, cars, clothes, and gadgets—why then do they not have more children? Are children literally an “inferior good?” This chapter examines the leading economic models that attempt to explain the negative relationship between income and fertility and finds that the models are fragile and less than convincing. The chapter looks at models that trade off the quality of children (the amount of time that is invested in children by parents) and the quantity of children, to see whether these models can be made consistent with the observed cross-section results.
Keywords: fertility theories, negative fertility-income relationship, economic models, high income people, higher opportunity cost, quality child care services, richer populations, cross-sectional relationship
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