Research program : Fertility & Incentives

Scientists are divided between those who believe that fertility is not subject to rational choice or control and those who believe it is. Most economists are on the rational-choice side, while demographers tend to ascribe to the no-choice view (see Lee, Journal of Demographic Economics, 2015). This divide overlaps with another partition between socioeconomic theories of the fertility decline on the one hand and diffusionist/cultural views on the other (following the denominations of Lee, 2015). The rational choice approach of Nobel Prize winner Gary Becker clearly belongs to the first strand, while, for example, the Princeton study which examined the timing of fertility change and the county level in Europe concludes in favour of the diffusionist/cultural view.

Understanding which mechanism matters most is important for policy design. If, according to the diffusionist/cultural view, fertility is a question of culture and norms instead of incentives, policy focusing on incentives (family allowances, tax break for families etc.) have little impact.

These slides give a general introduction to the subject.

I work more particularly on the following topics: Demographic convergence, Childlessness, Differential fertility, Population policy.

Demographic Convergence

We study whether fertility behavior reflects some spontaneous convergence forces leading population to a stable long-run level. In natural sciences, this property is called population homeostasis. In animal populations, the predator - prey models may display such a property, depending on their parameters. In human populations, predators are absent, but humans could act as such on the limited amount of resources. If convergence forces are at work, one should observe a correlation between fertility and population density. For high levels of density, fertility should be low for a population to stabilize.

We test the existence of such effect in 44~developing countries, matching georeferenced data from the demographic and health survey for half a million woman with population density grid. The following picture shows the different clusters (locations) considered.

clusters used in the analysis

When we correct for selection and endogeneity bias and control for the usual determinants of fertility such as education and income, a rise in density from 10 to 1000 inhabitants per square kilometer goes with a decrease in fertility by about 0.6 child. Duration analysis shows that age at marriage and age at first birth both increase with density.

Links:

Population Density, Fertility, and Demographic Convergence in Developing Countries, Journal of Development Economics [with P. Gobbi]

teaser teaser | abstract abstract | pdf article | appendix appendix | data data | photo photo | bibtex citation | homepage Gobbi


Marriage, Fertility and Childlessness

In this research, we study the increasing discrepancy between marriage and motherhood. We distinguish explicitly the decision to have children or not from the choice of the number of children. This distinction turned out to be highlighting, both in terms of data and theory.

In the paper "Development Policies when Accounting for the Extensive Margin of Fertility", we look at how childlessness (= the extensive margin of fertility) changes with economic development, and how it affects development policy recommendations. We first propose a methodology to identify the part of childlessness that is related to poverty. It is based on estimating the structural parameters of an economic model in which both men and women decide whether to marry and how many children to have. This estimation is carried out by a simulated method of moment, in which the empirical moments used in the estimation include fertility, childlessness and marriage rates for 36 developing countries. Comparing the breakdown of childlessness into its causes across countries, we show that when a country develops, poverty-driven childlessness diminishes. However, another type of childlessness appears: voluntary childlessness, which is driven by the high opportunity cost of having children for more educated individuals. Quantitatively, on average, one more year of education decreases poverty-driven childlessness by 0.75 percentage points, but increases opportunity-cost-driven childlessness by 0.57 percentage points from the 9th year of schooling onwards. As far as development policies are concerned, neglecting the endogenous response of marriage and childlessness leads to overestimating the effectiveness of family planning policies, except where highly educated mothers are also heavily affected by unwanted births, and to underestimating the effect of promoting gender equality on fertility, except in countries where poverty-driven childlessness is high.

The authors:
Paula, Thomas and I in Le Serre

In a previous paper, we identify several causes behind childlessness in the US that were not accounted for in previous studies of fertility. Childlessness can have natural, social or economic causes. Social sterility appears for women with low education and low non-labor income, either single or married. A woman with an income that is not high enough to allow her to procreate can escape this situation if it is optimal for her husband to abandon part of his own consumption in order to enable her to produce children within the couple. This should be highlighted: although aggregate fertility data suggests that Malthusian checks do not prevail any more and Becker's model describes the relationship between education and fertility well, our model detects that some categories of the population are still affected by Malthusian mechanisms. For highly educated women, childlessness is driven by a high opportunity cost of childrearing. We estimate that 2.5% of American women were childless because of poverty and 8.1% were childless because of a high opportunity cost of childrearing.

Links:

Development Policies when Accounting for the Extensive Margin of Fertility, IRES Discussion Paper 2015-03 [with T. Baudin and P. Gobbi]

teaser teaser | abstract abstract | pdf article | slides slides | youtube video | photo photo | bibtex citation | homepage Baudin | homepage Gobbi

Fertility and Childlessness in the United States, American Economic Review, 105, 1852-1882 [with T. Baudin and P. Gobbi]

teaser teaser | abstract abstract | pdf article | appendix appendix | slides slides | data data & code | blog blog | wiki wikipedia | bibtex citation | homepage Baudin | homepage Gobbi


Differential fertility

Matthias and I in Chicago

With Matthias Doepke, we emphasize that parents face a trade-off between having many children versus spending large resources on the health and education of each of them. This approach, first developed by Becker, is particularly successful to explain fertility differences as a function of the social class of the parents. Educated parents, for whom time is highly valuable on the labor market, will optimally choose to have few children but spend more resources on their education and health. This model predicts how the size and the composition of population would change in the future through their interaction with the economic and natural environment. Population dynamics, but also population composition, are essential for the development of poor countries and the future of the Earth.

Inequality and Growth

De la Croix and Doepke (2003) show that differential fertility accounts for most of the empirical relationship between inequality and growth. Poor parents decide to have many children and invest little in education. A mean-preserving spread in the income distribution increases the fertility differential between the rich and the poor, which implies that more weight gets placed on families who provide little education. Consequently, an increase in inequality lowers average education and, therefore, growth.

Policy implications are drawn in a second and third paper: Public education can help to promote growth by reducing differential fertility (De la Croix and Doepke 2004). When private and public education coexist (De la Croix and Doepke 2009), high social class families choose more often private education compared to low social class families. In our 2009 study, we ask why different societies make different choices regarding the mix of private and public schooling. We show that in a given political environment, high income inequality leads to more private education, as rich people opt out of the public system. More private education, in turn, results in an improved quality of public education, because public spending can be concentrated on fewer students. Comparing across political systems, we find that concentration of political power can lead to multiple equilibria in the determination of public education spending. The main predictions of the theory are consistent with state-level and micro data from the United States as well as cross-country evidence from the PISA study.

Inequality and Growth

Links:

To Segregate or to Integrate: Education Politics and Democracy, Review of Economic Studies, 76, 597-628, 2009 [with M. Doepke].

teaser teaser | abstract abstract | pdf article | slides slides | data data | blog blog | bibtex citation | homepage Doepke

Public versus private education when differential fertility matters, Journal of Development Economics, 73, 607-629, 2004 [with M. Doepke]

teaser teaser | abstract abstract | pdf article | bibtex citation | homepage Doepke

Inequality and growth: why differential fertility matters, American Economic Review, 93, 1091-1113, 2003 [with M. Doepke]

teaser teaser | abstract abstract | pdf article | slides slides | data data | bibtex citation | homepage Doepke


Population Policy

We explore the implications of setting up a system of tradable procreation entitlements to control population in a context of differential fertility, both domestically and at the global level.

One of the first tradable rights proposal was made by Boulding in the context of population control in 1964. We generalize his framework with both tradable procreation allowances and tradable procreation exemptions, in order to tackle both over- and under-population problems.

As far as human capital is concerned, natalist policy worsens the average education level of the next generation, while population control enhances it.

The implications of procreation rights for income inequality and education are contrasted. Our exploratory analysis suggests that procreation entitlements offer a promising tool to control population without necessarily leading to problematic distributive impact, especially at the global level. Moreover, if procreation rights are granted to countries in proportion to existing fertility levels (grandfathering) instead of being allocated equally, population control can be made even more redistributive.

Axel Gosseries

Links:

Population Policy through Tradable Procreation Entitlements, International Economic Review, 50, 507-542 [with A. Gosseries].

teaser teaser | abstract abstract | pdf article | slides slides | discussion discussion | wiki wikipedia | bibtex citation | homepage Gosseries

Procreation, Migration, and Tradable Quotas, in Population Aging, Intergenerational Transfers and the Macroeconomy, R. Clark, A.Mason and N. Ogawa eds, Cheltenham, UK:Edward Elgar Publishing, 227-249, 2007 [with A. Gosseries].

teaser teaser | pdf article | discussion discussion | bibtex citation | homepage Gosseries


In the following paper, we consider the effect of an environmental tax. As a tax on output would affect the wages, and hence, the opportunity cost of children, households would reallocate their time towards non market activities, such as leisure and reproduction. As reproduction today generates pollution tomorrow, the problem will be even worse in the future. Population will tend to increase and production per capita to decrease as generations pass. The conclusion of the endogenous fertility model would therefore be that capping emissions will gradually leads to larger and poorer successive generations.

Links:

The Natalist Bias of Pollution Control, Journal of Environmental Economics and Management, 63, 271-287 [with A. Gosseries]

teaser teaser | abstract abstract | pdf article | slides slides | bibtex citation | homepage Gosseries