SpringerLink
Log in

Fertility Determinants and Economic Uncertainty: An Assessment Using European Panel Data

  • Original Paper
  • Published:
Journal of Family and Economic Issues Aims and scope Submit manuscript

Abstract

This study examined the determinants of fertility, using panel data for 27 European countries. We employed panel co-integration to estimate fertility as function of demographic and economic variables. We showed that low fertility in most industrialized countries in Europe is due to low infant mortality rates, high female employment, low nuptiality rate, and high opportunity cost of having children. Using two measures of economic uncertainty, which are associated with labor market decisions—a production (an output) volatility measure and the unemployment rate—we examined to what extent economic insecurities affect fertility decisions. The empirical results showed that both measures of economic uncertainty have a significant negative impact on fertility implying that labor market insecurities might be a significant factor affecting fertility decisions.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Subscribe and save

Springer+ Basic
EUR 32.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or Ebook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5

Similar content being viewed by others

Notes

  1. Initially data were collected until the year 2007. However, it was decided to use data until the year 2005 since data for the years 2006 and 2007 were provisional.

  2. For more details of the estimation of production volatility see section “Methodology”.

  3. When the regression analysis reveals the existence of a relationship, otherwise not expected, then such regression is called spurious.

  4. The results for the unit root tests for the individual data are available upon request.

References

  • Attanasio, O. P., Picci, L., & Scorcu, A. (2000). Saving growth and investment: A macroeconomic analysis using panel of countries. Review of Economics and Statistics, 82(2), 182–211.

    Article  Google Scholar 

  • Bailey, R. E., & Chambers, M. J. (1998). The impact of real wage and mortality fluctuations on fertility and nuptiality in precensus England. Journal of Population Economics, 11(3), 413–434.

    Article  Google Scholar 

  • Barro, R. J., & Becker, G. S. (1989). Fertility choice in a model of economic growth. Econometrica, 57(2), 481–501.

    Article  Google Scholar 

  • Becker, G. S. (1960). An economic analysis of fertility. In Demographic and Economic Change in Developed Countries: A Conference of the Universities (NBER Committee of Economic Research). Princeton, NJ: Princeton University Press.

    Google Scholar 

  • Becker, G. S. (1965). A theory of the allocation of time. Economic Journal, 71, 493–517.

    Article  Google Scholar 

  • Becker, G. S. (1973). A theory of marriage: Part I. Journal of Political Economy, 81(4), 813–846.

    Article  Google Scholar 

  • Becker, G. S. (1981). A treatise on the family. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Becker, G. S. (1988). Family economics and macro behavior. American Economic Review, 78(1), 1–13.

    Google Scholar 

  • Becker, G. S. (1992). Fertility and the economy. Journal of Population Economics, 5(3), 185–201.

    Article  Google Scholar 

  • Becker, G. S., & Barro, R. J. (1988). A reformulation of the economic theory of fertility. Quarterly Journal of Economics, 103(1), 1–25.

    Article  Google Scholar 

  • Becker, G. S., Glaeser, E. L., & Murphy, K. M. (1999). Population and economic growth. American Economic Review Papers and Proceedings, 89(2), 145–149.

    Google Scholar 

  • Becker, G. S., & Lewis, G. H. (1973). On the interaction between the quantity and quality of children. Journal of Political Economy, 81(2 Part II), S279–S288.

    Article  Google Scholar 

  • Becker, G. S., Murphy, K. M., & Tamura, R. (1990). Human capital fertility and economic growth. Journal of Political Economy, 98(5), S12–S37.

    Article  Google Scholar 

  • Boucekkine, R., de la Croix, D., & Licandro, O. (2002). Vintage human capital, demographic trends, and endogenous growth. Journal of Economic Theory, 104, 340–375.

    Article  Google Scholar 

  • Brander, J. A., & Dowrick, S. (1994). The role of fertility economic growth: Empirical results from aggregate cross-national data. Journal of Population Economics, 7(1), 1–25.

    Article  Google Scholar 

  • Breitung, J. (2000). The local power of some unit root tests for panel data. In B. Baltagi (Ed.), Advances in econometrics, 15: Nonstationary panels, panel cointegration and dynamic panels (pp. 161–178). Amsterdam: JAI Press.

    Chapter  Google Scholar 

  • Cain, G., & Dooley, M. D. (1976). Estimation of a model of labor supply, fertility and wages of married women. Journal of Political Economy, 84, S179–S201.

    Article  Google Scholar 

  • Campione, W. (2008). Employed women’s well-being: The global and daily impact of work. Journal of Family and Economic Issues, 29, 346–361.

    Article  Google Scholar 

  • Carliner, G., Robinson, C., & Tomes, N. (1980). Female labour supply and fertility in Canada. Canadian Journal of Economics, 13, 46–64.

    Article  Google Scholar 

  • Choi, I. (2001). Unit root tests for panel data. Journal of International Money and Finance, 20, 249–272.

    Article  Google Scholar 

  • Cigno, A. (1991). Economics of the family. Oxford, UK: Clarendon Press.

    Google Scholar 

  • Cigno, A. (1998). Fertility decisions when infant survival is endogenous. Journal of Population Economics, 11(1), 21–28.

    Article  Google Scholar 

  • Colombino, U. (2000). The cost of children when children are a choice. Labour, 14, 79–96.

    Article  Google Scholar 

  • Craig, L. (2007). How employed mothers in Australia find time for both market work and childcare. Journal of Family and Economic Issues, 28, 69–87.

    Article  Google Scholar 

  • D’ Addio, A. C., & Mira d’Ecole, M. (2005). Policies, institutions and fertility rates: A panel data analysis for OECD Countries. OECD Economic Studies, 41, 8–45.

    Google Scholar 

  • Dickey, D. A., & Fuller, W. A. (1979). Distributions of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, 74(366), 427–431.

    Article  Google Scholar 

  • Dickey, D. A., & Fuller, W. A. (1981). The likelihood ratio statistics for autoregressive time series with a unit root. Econometrica, 49(4), 1057–1072.

    Article  Google Scholar 

  • Ehrlich, I. (1990). Introduction. Journal of Political Economy, 98(4), S1–S11.

    Article  Google Scholar 

  • Ehrlich, I., & Lui, F. T. (1991). Intergenerational trade, longevity, and economic growth. Journal of Political Economy, 99(5), 1029–1059.

    Article  Google Scholar 

  • Fleisher, B. M., & Rhodes, G. F, Jr. (1976). Unemployment and the labor force participation of married men and women: A simultaneous model. Review of Economics and Statistics, 58, 398–406.

    Article  Google Scholar 

  • French, M. W., & Sichel, D. (1993). Cyclical patterns in the variance of economic activity. Journal of Business and Economic Statistics, 11, 113–119.

    Article  Google Scholar 

  • Guest, R., & McDonald, I. M. (2001). Ageing, optimal national saving and future living standards in Australia. The Economic Record, 77, 117–134.

    Article  Google Scholar 

  • Hadri, K. (2000). Testing for stationarity in heterogeneous panel data. Econometric Journal, 3, 148–161.

    Article  Google Scholar 

  • Haque, N. U., Pesaran, M. H., & Sarma, S. (1999). Neglected heterogeneity and dynamics in cross-country saving regressions. UK: Mimeo, University of Cambridge.

    Google Scholar 

  • Herbst, C. M., & Barnow, B. S. (2008). Close to home: A simultaneous equation model of the relationship between child care accessibility and female labor force participation. Journal of Family and Economic Issues, 29, 128–151.

    Article  Google Scholar 

  • Hnatkovska, V. & Loayza, N. (2004). Volatility and growth. World Bank Working Papers, WPS3184.

  • Hondroyiannis, G. (2004). Modeling household fertility decisions in Greece. The Social Science Journal, 41, 477–483.

    Article  Google Scholar 

  • Hondroyiannis, G. (2006). Private savings determinants in European countries: A panel cointegration approach. The Social Science Journal, 43, 553–569.

    Article  Google Scholar 

  • Hondroyiannis, G., & Papapetrou, E. (2002a). Demographic transition and economic growth: Empirical evidence from Greece. Journal of Population Economics, 15(2), 221–242.

    Article  Google Scholar 

  • Hondroyiannis, G., & Papapetrou, E. (2002b). Demographic transition in Europe. Economics Bulletin, 10(3), 1–8.

    Google Scholar 

  • Hondroyiannis, G., & Papapetrou, E. (2004). Demographic changes and economic activity in Greece. Review of Economics of the Household, 2, 49–71.

    Article  Google Scholar 

  • Hondroyiannis, G., & Papapetrou, E. (2005). Fertility and output in Europe: New evidence from panel cointegration analysis. Journal of Policy Modeling, 27, 143–156.

    Article  Google Scholar 

  • Hotz, V. J., & Miller, R. A. (1988). An empirical analysis of life cycle fertility and female labor supply. Econometrica, 56, 91–118.

    Article  Google Scholar 

  • Huang, T, Jr. (2003). Unemployment and family behavior in Taiwan. Journal of Family and Economic Issues, 24, 27–48.

    Article  Google Scholar 

  • Huang, T, Jr. (2007). Labor force participation and juvenile delinquency in Taiwan: A time series analysis. Journal of Family and Economic Issues, 28, 137–150.

    Article  Google Scholar 

  • Huang, T, Jr., Kao, A. P., & Hung, W. C. (2006). The influence of college tuition and fees on fertility rate in Taiwan. Journal of Family and Economic Issues, 27, 626–642.

    Article  Google Scholar 

  • Im, K. S. M., Pesaran, H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115, 53–74.

    Article  Google Scholar 

  • Kalwij, A. S. (2000). The effects of female employment status on the presence and number of children. Journal of Population Economics, 13, 221–239.

    Article  Google Scholar 

  • Kao, C. (1999). Spurious regression and residual based tests for cointegration in panel data. Journal of Econometrics, 90, 1–44.

    Article  Google Scholar 

  • Kao, C. & Chiang, M. H. (1999). On the estimation and inference of a cointegrated regression in panel data. Working paper. Syracuse University Economics Department, Syracuse, NY.

  • Karimi, L., & Nouri, A. (2009). Do work demands and resources predict work family conflict and facilitation? A study of Iran male employees. Journal of Family and Economic Issues, 30, 193–202.

    Article  Google Scholar 

  • Klasen, S., & Launov, A. (2006). Analysis of the determinants of fertility decline in the Czech Republic. Journal of Population Economics, 19, 25–54.

    Article  Google Scholar 

  • Kose, A. M., Prasad, E. S., & Terrones, M. E. (2005). Growth and volatility in an era of globalization. IMF Staff Papers, 52, 31–63.

    Google Scholar 

  • Kwiatkowski, D., Phillips, P. C. B., Schmidt, P., & Shin, Y. (1992). Testing the null hypothesis of stationarity against the alternative of a unit root. Journal of Econometrics, 54(1–3), 159–178.

    Article  Google Scholar 

  • Lee, R. (2003). The demographic transition: Three centuries of fundamental change. Journal of Economic Perspectives, 17, 167–190.

    Article  Google Scholar 

  • Levin, A., Lin, C. F., & Chu, C. S. J. (2002). Unit root tests in panel data: Asymptotic and finite-sample properties. Journal of Econometrics, 108, 1–24.

    Article  Google Scholar 

  • Madala, G. S., & Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and Statistics, 61, 631–652.

    Article  Google Scholar 

  • Mahdavi, S. (1990). A simultaneous-equations model of cross-national differentials in fertility labor force participation rates. Journal of Economic Studies, 17, 32–49.

    Article  Google Scholar 

  • Mammen, S., Lass, D., & Seiling, S. B. (2009). Labor force supply decisions of rural low-income mothers. Journal of Family and Economic Issues, 30, 67–79.

    Article  Google Scholar 

  • Melkersson, M., & Rooth, D. O. (2000). Modeling female fertility using inflated count data. Journal of Population Economics, 13, 189–203.

    Article  Google Scholar 

  • Mocan, N. I. (1990). Business cycles and fertility dynamics in the United States: A vector auto regressive model. Journal of Population Economics, 3, 125–146.

    Article  Google Scholar 

  • Modigliani, F. (1966). The life cycle hypothesis of saving, the demand for wealth and the supply of Capital. Social Research, 33, 160–217.

    Google Scholar 

  • Modigliani, F. (1970). The life-cycle hypothesis of saving and inter-country differences in the saving ratio. In W. Eltis, M. Scott, & J. Wolfe (Eds.), Induction, growth and trade: Essays in Honor of Sir Roy Harrod. Oxford: Clarendon.

    Google Scholar 

  • Moffit, R. (1984). Profiles of fertility, labour supply and wages of married women: A complete life-cycle model. Review of Economic Studies, 51, 263–278.

    Article  Google Scholar 

  • Molina, J. A., & Montuenga, V. M. (2009). The motherhood wage penalty in Spain. Journal of Family and Economic Issues, 30, 237–251.

    Article  Google Scholar 

  • Murasko, J. E. (2008). Married women’s labor supply and spousal health insurance coverage in the United States: Results from panel data. Journal of Family and Economic Issues, 29, 391–406.

    Article  Google Scholar 

  • Nelson, D. B. (1991). Conditional heteroskedasticity in asset returns: A new approach. Econometrica, 59, 347–370.

    Article  Google Scholar 

  • Nguyen-Dinh, H. (1997). A socioeconomic analysis of the determinants of fertility: The case of Vietnam. Journal of Population Economics, 10, 251–271.

    Article  Google Scholar 

  • Pagani, L., & Marenzi, A. (2008). The labor market participation of sandwich generation Italian women. Journal of Family and Economic Issues, 29, 427–444.

    Article  Google Scholar 

  • Pampel, F. C. (1993). Relative cohort size and fertility: The socio-political context of the Easterlin effect. American Sociological Review, 58, 496–514.

    Article  Google Scholar 

  • Papapetrou, E. (2004). Does female employment affect fertility? Evidence from the United Kingdom. The Social Science Journal, 41, 235–249.

    Article  Google Scholar 

  • Pedroni, P. (1999). Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and Statistics, 61, 653–670.

    Article  Google Scholar 

  • Pedroni, P. (2004). Panel cointegration: Asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econometric Theory, 20, 597–625.

    Article  Google Scholar 

  • Perron, P. (1988). Trends and random walks in macroeconomic time: Series further evidence from a new approach. Journal of Economic Dynamics and Control, 12(2–3), 297–332.

    Article  Google Scholar 

  • Pesaran, M. H., & Smith, R. (1995). Estimating long-run relationships from dynamic heterogeneous panels. Journal of Econometrics, 68, 79–113.

    Article  Google Scholar 

  • Phillips, P. C. B. (1987). Time series regression with a unit root. Econometrica, 55(2), 277–346.

    Article  Google Scholar 

  • Phillips, P. C. B., & Perron, P. (1988). Testing for a unit root in time series regression. Biometrica, 75(2), 335–346.

    Article  Google Scholar 

  • Pommeret, A., & Smith, W. T. (2005). Fertility, volatility and growth. Economics Letters, 87, 347–353.

    Article  Google Scholar 

  • Poot, J., & Siegers, J. J. (2001). The macroeconomics of fertility in small open economies: A test of the Becker-Barro model for The Netherlands and New Zealand. Journal of Population Economics, 14(1), 73–100.

    Article  Google Scholar 

  • Rostow, W. W. (1990). Theorists of economic growth from David Hume to the present. New York: Oxford University Press.

    Google Scholar 

  • Sah, R. K. (1991). The effect of child mortality changes on fertility choice and parental welfare. Journal of Political Economy, 99(3), 582–606.

    Article  Google Scholar 

  • Sarantis, N., & Stewart, C. (2001). Saving behaviour in OECD countries: Evidence from panel cointegration tests. The Manchester School Supplement, 69, 22–41.

    Article  Google Scholar 

  • Simon, J. L. (1989). On aggregate empirical studies relating population variables to economic development. Population and Development Review, 15, 323–332.

    Article  Google Scholar 

  • Stanfors, M. A. (2006). Labor force transitions after childbirth among five birth cohorts in Sweden. Journal of Family and Economic Issues, 27(2), 287–309.

    Article  Google Scholar 

  • Wang, W., & Famoye, F. (1997). Modeling household fertility decisions with generalized poisson regression. Journal of Population Economics, 10, 273–283.

    Article  Google Scholar 

  • Wang, P., Yip, C. K., & Scotese, C. A. (1994). Fertility choice and economic growth theory and evidence. The Review of Economics and Statistics, 46(2), 255–266.

    Article  Google Scholar 

  • Weagley, R. O., Chan, M.-L., & Yan, J. (2007). Married couples’ time allocation decisions and marital stability. Journal of Family and Economic Issues, 28, 507–525.

    Article  Google Scholar 

  • Whittington, L. A., Alm, J., & Peters, E. H. (1990). Fertility and the personal exemption: Implicit pronatalist policy in the United States. American Economic Review, 80, 545–556.

    Google Scholar 

  • Willis, R. J. (1973). A new approach to the economic theory of fertility behavior. Journal of Political Economy, 81, S14–S64.

    Article  Google Scholar 

  • Winegarden, C. R., & Wheeler, M. (1992). The role of economic growth in the fertility transition in Western Europe: Econometric evidence. Economica, 59(236), 421–435.

    Article  Google Scholar 

  • Yilmazer, T. (2008). Saving for children’s college education: An empirical analysis of the trade-off between the quality and quantity of children. Journal of Family and Economic Issues, 29, 307–324.

    Article  Google Scholar 

Download references

Acknowledgment

I wish to acknowledge useful discussions and suggestions with Stephen Hall and helpful comments from three anonymous referees and the editor of the journal.

Author information

Authors and Affiliations

  1. Bank of Greece, Economic Research Department, Harokopio University, E. Venizelos 21, 102 50, Athens, Greece

    George Hondroyiannis

Authors
  1. George Hondroyiannis
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to George Hondroyiannis.

Additional information

The views expressed in this paper are those of the author and not those of the Bank of Greece. All errors and deficiencies are the responsibility of the author.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Hondroyiannis, G. Fertility Determinants and Economic Uncertainty: An Assessment Using European Panel Data. J Fam Econ Iss 31, 33–50 (2010). https://doi.org/10.1007/s10834-009-9178-3

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10834-009-9178-3

Keywords

Search

Navigation