Abstract
This paper explores the influence of the two historical and arguably most important correlates of fertility, i.e. female labor participation and pensions. We confirm the long-established negative impact of government provided pensions and all other welfare state social policies except pro-family ones on fertility between 1990 and 2013 in OECD countries. We also claim the reports about positive correlation between female labor participation and fertility, which caused a recent upsurge in research, to be spurious. Our results show a statistically insignificant relationship as a result of pro-family policies designed to offset the negative impact of female labor participation. We conclude that current societies in developed countries continue to have an unsustainable level of reproduction to an extent allowing depopulation, largely due to high and ever increasing female labor participation and a high level of social expenditure, particularly on pensions. We suggest an alternative set of pro-family and pro-natality policies and a decrease in social expenditure as a possible solution.
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Notes
The list of possible influences on TFR is obviously much longer. Guinnane (2011) gives a possible summary in his theoretical paper about the major economic explanations for fertility transition.
For a literature review of the rise and fall of fertility restrictions in early Europe please see Voigtländer and Voth (2012).
Note that this Figure displays social expenditure as a percentage of GDP. Our choice of this measure was motivated by the need to analyze social expenditure as an incentive or disincentive for having children, for which they need to be comparable across countries, especially in relation to the average wealth level in the country. The result of this choice is that part of the social expenditure development as visualized in Fig. 1, especially the peak in 2008 and subsequent significant drop, may be driven not so much by a change in social expenditure in absolute terms, but rather as a drop and then a recovery of GDP during the crisis and post-crisis period.
The number of years required for the population of an area to halve its size with current population growth, a mirror to doubling time.
For example, the Czech word “výminek” stems from the word “vymínit si”, or ‘to demand’, referring to the situation where the parent bequeaths the family inheritance usually to the oldest or strongest son in exchange for a separate room or an annex to the house, food rations and possibly rudimentary health care. The differences across cultures and countries, however, vary greatly from written contracts within extended family to the other extreme of no economic relationship between parents and children from the mid-teens, when children leave home (Guinnane 2011).
The number of children considered ideal by the general public is becoming a vital piece of sociological evidence. The reason for this is straightforward. In her description of the ageing Japanese society, Boling (2008) describes different types of personal gratification before marriage which lead to its postponement and late childbearing in order to conclude: “Perhaps the self-fulfilling quality of such decisions and values is leading Japan into a “fertility trap” as theorized by Lutz et al. (2006), which seems already to have changed the ideal number of children in Germany from 2.0 to 1.76” (Boling 2008, p. 321). Let us note that Germany has real TFR below 1.76 and is depopulating by about 200,000 people every year with negative prospects.
Eurobarometer survey (2008), family life and the needs of an aging population, summary.
These countries are: Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, South Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom and United States.
More precisely, only one variable, the wage gap between sexes, is available since 2000 only. However, from a theoretical point of view (and based on our empirical findings as well), it is a crucial variable in the model.
Note that favourable conditions for women on the labor market should not be restricted only to employed women and that self-employment (entrepreneurship) is often a way how mothers reconcile their professional and family life. As Zwan et al. (2016), women engage in “necessity entrepreneurship” significantly more often than men.
Note also that the relationship between social expenditure and family can get even more complex when inter-family altruism is taken into account, as shown by Koda and Uruyos (2015).
To further support this conjecture, we performed auxiliary regressions confirming that social expenditure on family (containing expenditure on maternity and parental leave) are positively correlated with female labor force participation and negatively correlated with unemployment.
A financial tool reportedly tested in Estonia. The amount is linked to the mother's previous wages.
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Evan, T., Vozárová, P. Influence of women’s workforce participation and pensions on total fertility rate: a theoretical and econometric study. Eurasian Econ Rev 8, 51–72 (2018). https://doi.org/10.1007/s40822-017-0074-0
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DOI: https://doi.org/10.1007/s40822-017-0074-0