posted on 25 December 2016
from the St Louis Fed
-- this post authored by Guillaume Vandenbroucke
The decision to have a child can be a costly decision. So are there any reasons to believe that economic considerations play a role in deciding to have children?
The figure below shows the relationship between fertility (more specifically, the total fertility rate) and gross domestic product (GDP) per capita (measured in 2010 U.S. dollars) across countries in 2000. The total fertility rate is the expected number of births a woman would have over the course of her life.
The decreasing relationship between the two variables demonstrates the connection between fertility choices and economic considerations. In general, poor countries tend to have higher levels of fertility than rich countries.
In particular, women tend to give birth to no fewer than three children in countries where GDP per capita is below $1,000 per year. In countries where GDP per capita is above $10,000 per year, women tend to give birth to no more than two children.
This decreasing relationship between fertility and income is well known to economists and demographers alike. In addition, it holds true over time: Rich countries, such as the U.S., have experienced a remarkable decline in their fertility rate as they became rich. Also, the relationship holds at the individual level, as rich families tend to have fewer children than poor families.
Why is fertility so much higher in poor countries? There are several possible reasons:
Views expressed are not necessarily those of the Federal Reserve Bank of St. Louis or of the Federal Reserve System.
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