On the Determinants of Fertility: Evidence from Developing and Developed Countries

Abstract

This paper studies the determinants of fertility in a panel of 150 developing and developed nations. The paper finds striking differences between these two groups. Taxation, income per capita and female labor-force participation positively affect fertility of the developed countries, but they do not have robust effects on fertility in the developing world. The male labor-force participation rate is important in explaining fertility in developing countries and it has a bigger (positive) impact on fertility than the female labor-force participation rate. Furthermore, a model with only the female labor-force participation rate and the tax rate explains a significant portion of fertility of the developed nations, but it fully fails in accounting for fertility of the developing countries. Adding the mortality rate enables the model to explain nearly 70% of the fertility of developing countries, but does not significantly improve the explanation of fertility of developed countries. The paper, thus, suggests that standard models of endogenous fertility that are centered around female labor supply may be ill-suited to explain fertility in developing countries and that the mortality rate remains the key determinant of fertility of this group. A possible explanation for this result is that the typical economic considerations that people in developed countries make with respect to fertility are not, in general, equally relevant for developing nations.