Chapter 4: Economics of Fertility Fertility: “baby-making” trends (not ability to conceive) Trends: Decline over time –1960: typical woman: 3.65 kids –2000: typical woman: 2.1 kids Replacement rate: fertility rate that results in population not growing or shrinking. –Replacement fertility rate = 2.1 Also: big  out of wedlock births, particularly for teenagers.

Terms to Describe Fertility Trends Can use more specific data for specific age groups, races, or marital states. See Table 1: –Birth rate; –Fertility rate; –Non-marital fertility rate; –Total fertility rate; –Non-marital birth ratio. Previous overhead: –Total fertility rate = # births avg woman today would have over lifetime if she had the age-specific fertility rates that prevail today.

Fertility Trends Over Time See Figure 1: learn to read two- component graphs with two different vertical axes. Fertility rate (births per 1000 women): –Baby boom: ; –Baby bust: big decline in 60s and early 70s; –Near stability since then. Total Fertility Rate: –At peak of boom: 3.5 kids –At bottom of bust: 1.7 kids

Non-marital Fertility Trends See Figure 2: –Steady  from 1940 thru 1970 (a 300%  ); –Then more  in 1980s and early 1990s; –Currently  44 to 45 births per 100 single women. See Figure 3: –Shows % of all births that are to single women.; See huge  ; –1940: 4% ; 1990s: 33%; –Trend actually from multiple factors (I.e., marriage rates, including  cohabitation; marital fertility).

Fertility Trends by Race See Table 2: –Fertility rate similar across race/ethnicity. –Non-marital fertility varies by race; –See % of all births to unmarried woman. –Note: difference by in this % is  over time. –Note: Hispanic is an ethnicity so listed by itself but individuals in this group appear in specific racial groups also.

International Fertility Trends See Table 3: –See  for every country listed. –In some countries: serious policy concern (ex. Italy). Lesser developed countries: –Average = 5.1 but also is . Key link:  education levels associated with  fertility. High non-marital fertility rates: –Iceland: 64% –Sweden: 54% –France: 40% –Italy: 9% –Japan: 1%

Thomas Malthus: developed 1 st economic approach to fertility. Theory: –Food supplies increase arithmetically while population increases exponentially so eventually the population becomes unsustainable and we all starve. –Economics as dismal science. Key Points: –Contribution: linked economic variable (wage) to marriage  fertility –Missed link: wage affects marriage decision then kids come automatically; failed to model fertility explicitly so missed connection between  wages and  fertility.

Modern Economic Analysis of Fertility Becker (early 1960s): –“An Economic Analysis of Fertility” Basic point of model: –Most adults would like to have children; they utility from their kids. –Theoretical model tells us that decision to have kids is influenced by parents’ wages but model cannot predict direction of relationship (positive or negative).  Mom’s wage: –  value of her time so  cost of her spending time with kids and  paid work   kids. –But also  ability to buy all goods including stuff for kids   kids.

Quantity/Quality Trade-off If a family has same amount of $$ to spend on kids: might want to have lots of kids but spend little on each one OR have few kids but spend more on each kid. So if became easier to provide better quality relative to increasing # kids, might want fewer kids.

So WHY Has Fertility Fallen? Rising real wages for women that has caused  work by women plays a role if rising family income component causes  quality. Improvements in birth control.  female education that delays fertility. Movement of women into professional occupations that delays fertility.