Forecasting births in Greater London: An application of the easterlin hypothesis

Abstract

Summary A model for forecasting fertility is proposed in which an attempt is made to represent the cyclical fluctuations in fertility typical of developed societies. R. A. Easterlin has put forward the hypothesis that relative affluence, i.e. tension between material aspirations and resources, is an important determinant of fertility behaviour. Relative cohort size in turn affects relative affluence, because the size of a cohort influences its competitive position in the labour market. However, predictions based on relative cohort size alone neglect other sources of periodic fluctuations in fertility, such as those arising from generational cycles. A periodic component which expresses fertility variations as a direct function of time is, therefore, included in this model. A time series of age-specific fertility rates and population estimates for England and Wales and for Greater London is used to assess the relationship between fertility, relative cohort size, and the periodic time function. There is evidence of significant cyclic effects and some support for the Easterlin hypothesis in that the fertility of younger age groups is inversely related to the relative size of older cohorts. Projections are made of the future trend in total fertility assuming a continuation of the observed relationship. Use of different assumed periodicities permits the generation of variant projections of fertility.