Drill, baby, drill: Natural resource shocks and fertility in Indonesia

Abstract

We find that positive natural resource shocks lead to increased fertility in Indonesia by exploiting temporal variation in world oil prices and cross-sectional variation in oil endowments across regencies. Results are driven by women of all ages, by both first and higher order births, and we find no evidence of changes in birth spacing. Altogether, this indicates an increase in completed fertility. We present empirical evidence and cite prior literature demonstrating corresponding improvements in households’ economic outcomes, consistent with positive income effects on fertility in a developing economy.