There is no low-level fertility and development trap

The theory of the low-level equilibrium trap asserts that an increase in income stimulates population growth sufficiently so that the additional people ‘eat up’ the ‘surplus’ over subsistence, and hence drive the level of income back to subsistence. Originally the theory referred primarily to mortality, but nowadays its application is to fertility. In the long-run equilibrium context in which the theory is ordinarily presented, the fact that the long-run elasticity of fertility with respect to income is negative in less developed countries fatally contradicts the accepted version of the trap. But to give every chance for trap theory to be meaningful, the paper presents a period-by-period analysis, embodying larger-than-observed positive elasticities during the early years and the logically necessary counterbalancing negative elasticities during the later years. These elasticities are combined with consumption and production figures for various age groups to estimate the effect in each year after the windfall, and altogether. The results show that even under assumptions not charitable to the conclusion of this paper, additional children do not even come close to ‘eating up’ the increase in income which induced their births, so that the trap theory is falsified.     

Puzzles and further explorations in the interrelationships of successive births with husband’s income,spouses’ education and race

When fertility is examined in the detail of individual parity progressions and birth-order transitions, important interactions between the effects of income and education are seen. Among the findings are: the negative effect of education on fertility is stronger at all parities for less educated compared to more highly educated women. Additional income has a more positive effect for more highly educated than for less educated women. For women with 0-8 years of education the effect of more income is positive when the family has no children but negative thereafter, but for college-educated women the effect of more income is positive. And additional income has a less positive (more negative) effect on fertility among nonwhites than among whites.     

Mathematical investigations of the escape from the Malthusian trap

We present a simulation model that synthesizes Malthusian and Boserupian notions of the way population growth and economic development were intertwined. The non‐linear stochastic model consists of a system of equations whose dynamics culminate in an industrial revolution after hundreds of iterations. The Industrial Revolution can thus be conceptualized as a permanent “escape”; from the Malthusian trap that occurs once the economy is capable of permanently sustaining an ever growing population. We investigate the conditions for such an escape and their sensitivity to the parameters of the model. This is done in an attempt to understand why some economies might have had difficulties escaping from the Malthusian trap (in contrast to the European experience in the eighteenth and nineteenth centuries). Our results show that the likelihood of an escape is sensitive to the savings rate and to the output elasticities of the two sectors of the economy. When not in a subsistence crisis, the chances that an escape will occur increase for larger values of the ratio of the savings rate to the growth rate of the population. The chances of an escape also increase substantially for larger values of the output elasticities of labor.     

On testing Easterlin's hypothesis using relative cohort size as a proxy for relative income

Measures of Canadian fertility (total fertility rate and fifteen-year age-specific fertility rate F_15–29) and relative cohort size (population aged 30–64 years divided by population aged 15–29 years) show a close co-movement between 1940 and 1976 but record a marked departure since then. The application of cointegration techniques to these series (1921–1988) shows that they do not form an equilibrium relationship even over the period 1940–1976. Contrary to the expected relationship between relative cohort size and relative income, income data by age groups show that there is no tight relationship between them. The absence of an equilibrium relationship between relative cohort size and fertility, therefore, does not necessarily imply that Easterlin's hypothesis is false.I would like to thank Paul Maxim for allowing me to use his data set for this analysis. My thanks are also due to Peter Smith and three anonymous referees for their constructive comments on this work.     

Policies Addressing the Tempo Effect in Low‐Fertility Countries

The possible negative consequences of current low fertility levels are causing increasing concern, particularly in countries where the total fertility rate is below 1.5. Social inertia and self‐reinforcing processes may make it difficult to return to higher levels once fertility has been very low for some time, creating a possible “low‐fertility trap.” Policies explicitly addressing the fertility‐depressing effect of increases in the mean age at child‐bearing (the tempo effect) may be a way to raise period fertility to somewhat higher levels and help escape the “low‐fertility trap” before it closes. Reforms in the school system may affect the timing of childbearing by lowering the age at completion of education. A more efficient school system, which provides the same qualifications with a younger school‐leaving age, is potentially capable of increasing period fertility and hence exerting a rejuvenating effect on the age composition, even if the levels of cohort fertility remain unchanged. Such policies may also have a positive effect on completed cohort fertility.     

The influence of income on family fertility in the light of the results of empirical studies

Based on data from the 1973-83 Polish Family Budget Survey, this study examines the influence of income as a source of maintenance and income as a determinant of childbearing on family parity. It is assumed that income influences parity as a source of maintenance and as an influence on lifestyle or reproductive behavior. As a source of maintenance, the influence will be positive. As a life-style factor, it could be positive or negative. The hypotheses are 1) that positive influences are characteristics of older couples with a lower educational level and living in villages and small towns and income is a source of maintenance, and 2) a negative influence on parity reflects younger couples with higher educational levels from larger cities and income is a life-style factor. Some examples of how the theory of income influences total fertility are given in addition to a further elaboration of the theory. Other concepts introduced, as related to childbearing, are the value of goods and services with unchanged preferences and an increase in income, with preferences changing with income increases, with income preferences for nonprocreational and for procreational needs, and income as a factor influencing procreational needs and behavior. Correlation analysis is conducted for 33 subpopulations based on duration of marriage, educational level of the household, and size of residence. The results indicate that, in years 1973, 1975, and 1978 when income and parity are significant, the sign is positive. In 1980, there was a decrease in the number of subpopulations with a significant relationship, and in 3 subpopulations the results were negative. The 13 positive subpopulations were similar to those in the 1970s. In 1983, income explained an even smaller amount of parity. The subpopulations with a postive relationship usually have longer marriage durations, which suggest income as a source of maintenance. Negative results were among subpopulations with shorter marriage durations, which suggests life-style factor effects of income.     

Mathematical investigations of the escape from the Malthusian trap

"We present a simulation model that synthesizes Malthusian and Boserupian notions of the way population growth and economic development were intertwined. The non-linear stochastic model consists of a system of equations whose dynamics culminate in an industrial revolution after hundreds of iterations. The Industrial Revolution [in Europe] can thus be conceptualized as a permanent 'escape' from the Malthusian trap that occurs once the economy is capable of permanently sustaining an ever growing population. We investigate the conditions for such an escape and their sensitivity to the parameters of the model....Our results show that the likelihood of an escape is sensitive to the savings rate and to the output elasticities of the two sectors of the economy. When not in a subsistence crisis, the chances that an escape will occur increase for larger values of the ratio of the savings rate to the growth rate of the population. The chances of an escape also increase substantially for larger values of the output elasticities of labor." (SUMMARY IN FRE)     

Additional Work,Family Agriculture,and the Birth of a First or a Second Child in Russia at the Beginning of the 1990s

At the beginning of the transition period, many Russian households faced substantial economic hardships and uncertainties. An economic downturn had become one of the major factors responsible for the significant and rapid decline of Russian fertility. However, many households tried to cope with this situation by engaging in multiple income generating activities and the cultivation of food on private plots of land. The question therefore arises whether these activities had a positive impact on fertility decisions. This paper explores the association between additional employment or subsistence measures (second jobs, part-time self-employment, and part-time family agriculture) and the probability to have a first or a second child in Russia during 1990 and the spring of 1993. Data from 966 respondents from the Russian component of the survey Social Stratification in Eastern Europe after 1989: General Population Survey show that activities that generate an additional income were positively associated with the birth of a second child. This is especially the case if these activities produce half of a respondent's or her household's income. The birth of a second child was also positively associated with the fact that a household consumed food that was cultivated by the household itself. However, none of these activities was significantly connected with the birth of a first child.     

Children as insurance

This paper presents a dynamic model of fertility decisions in which children serve as an incomplete insurance good. The model incorporates uncertainty about future income and the survival of children as well as a discrete representation of the number of children. It contributes to the understanding of the negative relation between fertility and education, shows why parents may demand children even if the return is negative, and explains why fertility might rise with increasing income when income is low and decrease when income is high. Furthermore, the model can account for the decline in fertility when the risk of infant and child mortality decreases. Finally, the implications for empirical tests of the demand for children are also examined. Received: 8 September 1998/Accepted: 9 June 1999     

Inequality and demographic response to short-term economic stress in North Orkney,Scotland, 1855–1910: Sector differences

We examine economic inequality and social differences in infant and child mortality, and fertility responses to food price changes in North Orkney, 1855–1910, using linked vital records. This small population featured a diverse occupational structure, limited land resources, and geographic isolation from mainland Scotland. Segments of Orkney’s non-agricultural working population were living so close to the margin of subsistence in normal years that an increase in food prices in bad years cost the lives of their children. Delayed childbearing, in addition to increased labour intensity, occupational diversification, and poor relief, failed to mitigate the negative effects of unfavourable prices in this group. While previous studies for Western Europe show a strong social gradient in mortality responses to food prices, and for Eastern Asia a strong household gradient, this study shows a strong sectoral gradient, indicating low standards of living for the non-agricultural working population well into the twentieth century.     

Endogenous fertility and human capital in a Schumpeterian growth model

This study develops a scale-invariant Schumpeterian growth model with endogenous fertility and human capital accumulation. The model features two engines of long-run economic growth: R&D-based innovation and human capital accumulation. One novelty of this study is endogenous fertility, which negatively affects the growth rate of human capital. Given this growth-theoretic framework, we characterize the dynamics of the model and derive comparative statics of the equilibrium growth rates with respect to structural parameters. As for policy implications, we analyze how patent policy affects economic growth through technological progress, human capital accumulation, and endogenous fertility. In summary, we find that strengthening patent protection has (a) a positive effect on technological progress, (b) a negative effect on human capital accumulation through a higher rate of fertility, and (c) an ambiguous overall effect on economic growth.     

Income inequality and fertility: A comparative view

Summary Most studies pertaining to the relationship between population and economic development suffer from a major flaw. Researchers use aggregate measures like income or energy consumption per head as indicators of economic development. Such aggregate measures fail to take into account the nature of the distribution of income or energy consumption to the population. The present study attempts to demonstrate the importance of incorporating the nature of distribution of resources as an important intervening variable in the study of the overall relationship between population and economic development. A measure of income inequality is developed which represents the difference between rural and urban incomes. This measure is justified in terms of the distinctiveness of urban and rural sectors in the process of development. The data used relate to societal measures of fertility, income, income inequality, etc. Consistently with existing literature, we observe that, generally speaking, economic development does entail a reduction in rural-urban income inequalities. On the other hand, a substantial part of the negative effect of an increase in income per head can be nullified if such an increase were not also accompanied by a reduction in rural-urban income inequality. Also, a substantial part of the negative effect of an increase in income per head and the level of education in reducing the level of infant mortality would be nullified if it did not also result in a reduction of rural-urban income inequality. On the other hand, it is quite possible for the level of education in a society to increase together with an increase in income per head without substantially altering the extent of inequality of income between the rural and the urban population. It is suggested that the positive relationship between rural-urban income inequality and the level of fertility is due to higher rural fertility rates in a high-inequality country. By implication, this would mean that higher standards of living for the rural population compared with its urban counterpart will have a favourable impact in reducing rural fertility.     

Population aging and endogenous economic growth

We investigate the consequences of population aging for long-run economic growth perspectives. Our framework incorporates endogenous growth models and semi-endogenous growth models as special cases. We show that (1) increases in longevity have a positive impact on per capita output growth, (2) decreases in fertility have a negative impact on per capita output growth, (3) the positive longevity effect dominates the negative fertility effect in case of the endogenous growth framework, and (4) population aging fosters long-run growth in the endogenous growth framework, while its effect depends on the relative change between fertility and mortality in the semi-endogenous growth framework.     

More than an urban legend: the short- and long-run effects of unplanned fertility shocks

This paper examines the short- and long-run effects of a quasi-exogenous variation in fertility behavior due to a yearlong period of power rationing in Colombia in 1992. We show that power shortages caused a mini baby boom and that the increase in fertility was unplanned and persistent: the time in between births was reduced and overall lifetime fertility increased. We also present evidence suggesting that women who had a baby due to the outage found themselves in worse socioeconomic conditions 12 years later.     

Cointegration modeling of fertility in the United States

This paper presents estimates of a multiple time series model of fertility, female labor force participation, women's wages, and the relative cohort size of younger to older adult males. Cointegration methods permit modeling of these nonstationary variables, yielding estimates of the long-run relation among the variables, and the dynamic response of each variable to displacements from the steady state. The estimated steady state relation between fertility and the other variables is consistent with economic models of fertility, with fertility negatively related to female wages and male relative cohort size. Fertility responds to cohort size in a manner that is consistent with Easterlin's relative income model of household behavior. Finally, both female labor market variables adjust significantly to departures from the steady state relation, implying that they cannot be treated as exogenous in time series models of fertility.     

Economic motives for family limitation

Abstract Taiwan can boast one of the most rapid rates of economic development in the world over the past 20 years. Taiwan is also in the midst of the demographic transition. The nature of the connection between economic development and the onset and progress of the fertility decline is far from clear, however. Rather than explore the relation between income and fertility change, this paper will be concerned with some of the economic motivations which may be responsible for fertility decline during the demographic transition. Inquiries in this area have been handicapped by having to rely on aggregative or on household data which included only a very limited set of economic variables (other than income) along with demographic data. In order to re-examine the linkages between economic change and fertility change at the family level, a special survey was conducted in Taiwan in 1969. While recognizing that economic factors are not wholly, perhaps not even primarily, responsible for the lowering of the birth rate, the central interest of this paper is the complex of cost and benefit considerations which may contribute to a decline of the rate, using the new data for Taiwan.     

Low Fertility Trap:Theories,Facts and Implications

The low Fertility Trap Hypothesis proposes that there are three self-reinforcing mechanism--demographic,sociological and economic,working towards a downward spiral in future fertility.Once TFR drops below 1.5,it will be difficult to recover.The fertility recovery emerging in many countries across the world has changed the lowfertility trap theory and also the justification of the theory itself.So low-fertility trap is more likely a pattern summarized from a short-time phenomenon than a generalized social law.As with China,the current fertility level is above 1.5 births per woman,and China is not in the "Low-fertility trap".Moreover,most recent surveys suggests that current fertility intention in China is above 1.8 births per woman and more than60 percent of people would have a second child if there is an adjustment of fertility policy.In addition,birth postponement is still playing an important role in reducing TFR in China.Thus,with the high fertility intention,adjustment of family planning policy and decreasing tempo effect,TFR in China will experience upturn but not further decline in the near future.It is lack of evidence to conclude that China has already been or is going to be trapped in low fertility.     

生育激励与个人所得税 ——理论逻辑与经验论据

中共十九大报告提出要进一步“促进生育政策和相关经济社会政策配套衔接”。在厘清税收激励生育的理论逻辑基础上,运用工资税模型,获取OECD国家对此的经验论据。结果显示,许多国家运用税收政策向有子女家庭提供正向激励,且更注重中低收入家庭。进一步分析发现,通常为符合资格条件的儿童设计相同的或递增的定额税收优惠,甚至为大规模家庭赋予额外优惠;将儿童税收宽免转化为抵免,引进收入限制和可退抵免制;单亲家庭可享受额外优惠,而已婚家庭还通过个人申报纳税、婚姻优惠、家庭申报纳税等多种举措受益。应汲取和借鉴OECD国家的成功经验,逐步构建我国“生育友好型”的税收制度。     

A stochastic version of the Malthusian Trap Model: consequences for the empirical relationship between economic growth and population growth in LDC's

A stochastic version of the Malthusian trap model relating the growth rate of income per capita to the population growth rate of a given country is described. This model is applied to the a priori evaluation of the cross-sectional correlation between these 2 growth rates under 2 additional assumptions: 1) the relations in the model at national levels include country-specific and time-invariant random components, and 2) these growth rates are measured with a certain degree of temporal aggregation. It is shown that these 2 assumptions can explain near-0 correlations between the 2 growth rates even if there exist a strongly negative effect of population growth on economic growth. However, it is not clear whether these assumptions fully explain such insignificant correlations. Indeed, the implementation of the model is complicated by the structural shifts which are likely to occur in the equations over the course of the demographic transition.     

Ethnic variations in the relationship between income and fertility

The effects of husband'spotential andrelative incomes on completed fertility, as well as their effects on certain parity progression probabilities, are examined within samples of Anglos, Blacks and Mexican Americans. Relationships are estimated using data from the one-percent 1960 and 1970 U.S. Public Use Samples. The results reveal different patterns of relationship by ethnicity between the measures of income and the measures of fertility. The effects on completed fertility of the income measures are positive for Anglos and negative for Blacks, while in the case of Mexican Americans the effect ofpotential income is negative and that ofrelative income is positive. Income effects on the parity progression probabilities are similar in pattern to those from the analyses using completed fertility, although somewhat different patterns tend to appear at different birth orders, especially among Anglos.