“Backslanted X” fertility dynamics and macroeconomics

Abstract

A large number of pairs of countries exhibit a dynamic pattern in which: (1) Fertility in both countries declines across time; (2) initially, one country has a higher fertility and a lower per-capita income than the other; and (3) in time, as per-capita incomes converge, fertility rates in the poorer country become lower than in the richer one. This article documents the prevalence of such dynamics and offers a theoretical model in which these dynamics emerge endogenously. Assuming differences in the degree of utility substitution between consumption and rearing children across countries generates all three components of these dynamics.