Women’s Relative Earning Power and Fertility: Evidence from Climate Shocks in Rural Madagascar

The unified growth theory (Galor and Weil, 1996) suggests that a high gender gap in earning power increases fertility rates. This paper presents the first microfounded test of this hypothesis, focusing on the critical age interval where this theory binds. Using household data from rural Madagascar—where restrictive gender norms and reliance on rainfed agriculture are prevalent—we exploit temporal and spatial variations in rainfall deficits at the grid-cell level during the growing season to measure women’s relative economic opportunities. Our analysis, controlling for grid-cell and year-of-birth fixed effects and accounting for the spatial correlation of drought episodes, reveals that drought significantly increases completed fertility only when experienced during adolescence. We show that school dropout among adolescent girls and the widening gender gap in economic opportunities drive this increase. Moreover, drought exposure raises adolescent girls’ marriage hazards and the likelihood of having multiple sex partners, triggering early childbearing, especially in agricultural households without irrigation. This study supports the unified growth theory by linking negative climate shocks to women’s relative earning power and fertility decisions, highlighting the need for policies addressing gender disparities and environmental vulnerabilities.