Poor families (and countries) tend to have more children. Women have to choose between work and children. These two empirical regularities have held for quite long. The economics of fertility has entered a new era because these stylized facts no longer universally hold—according to a recent IZA working paper “The Economics of Fertility: A New Era”.
The chart of the week shows one of the underlying factors—sharing household burden. The sample of OECD countries shows strong positive correlation between fair sharing of household work and total fertility rate.
According to the research, in high-income countries, the income-fertility relationship has flattened and—in some cases—reversed. The cross-country relationship between women’s labour force participation and fertility is now positive.
There is a number of new theories, explaining the compatibility of women’s career and family goals—a key driver of fertility. Four common factors facilitate combining a career with a family: (i) family policy; (ii) cooperative fathers; (iii) favourable social norms; and (iv) flexible labour markets.
These things don’t come automatically, investments in social care could make difference. Time poverty could hold back women labour market participation, even if other factors are favourable. Researchers suggest that public investment in the social care services sector have a significant multiplicative effect and create jobs in other sectors. The new economics of fertility hints that now there is no inevitable trade-off between women empowerment and fertility.