IDEAS home Printed from https://ideas.repec.org/p/zbw/glodps/360.html
   My bibliography  Save this paper

Economic Uncertainty and Fertility

Author

Listed:
  • Gözgör, Giray
  • Bilgin, Mehmet Huseyin
  • Rangazas, Peter

Abstract

In this paper, we conduct an empirical study of the effect of uncertainty on fertility. The precautionary motive for saving predicts that an increase in uncertainty increases saving by reducing both consumption and fertility. We use a new measure of uncertainty, the World Uncertainty Index, and focus on data from 126 countries for the period from 1996 to 2017. The empirical findings indicate that uncertainty shocks decrease the fertility rate. This evidence is robust to different model specifications and econometric techniques as well as to the inclusion of various controls.

Suggested Citation

  • Gözgör, Giray & Bilgin, Mehmet Huseyin & Rangazas, Peter, 2019. "Economic Uncertainty and Fertility," GLO Discussion Paper Series 360, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:360
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/199088/1/GLO-DP-0360.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert C. Feenstra & Robert Inklaar & Marcel P. Timmer, 2015. "The Next Generation of the Penn World Table," American Economic Review, American Economic Association, vol. 105(10), pages 3150-3182, October.
    2. David Lagakos & Benjamin Moll & Tommaso Porzio & Nancy Qian & Todd Schoellman, 2018. "Life Cycle Wage Growth across Countries," Journal of Political Economy, University of Chicago Press, vol. 126(2), pages 797-849.
    3. Osili, Una Okonkwo & Long, Bridget Terry, 2008. "Does female schooling reduce fertility? Evidence from Nigeria," Journal of Development Economics, Elsevier, vol. 87(1), pages 57-75, August.
    4. Giray Gozgor & Priya Ranjan, 2017. "Globalisation, inequality and redistribution: Theory and evidence," The World Economy, Wiley Blackwell, vol. 40(12), pages 2704-2751, December.
    5. Christina D. Romer & David H. Romer, 2010. "The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks," American Economic Review, American Economic Association, vol. 100(3), pages 763-801, June.
    6. Salam Abdus & Peter Rangazas, 2011. "Adult Nutrition and Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(4), pages 636-649, October.
    7. Finlay, Jocelyn E., 2009. "Fertility response to natural disasters : the case of three high mortality earthquakes," Policy Research Working Paper Series 4883, The World Bank.
    8. Zvi Eckstein & Pedro Mira & Kenneth I. Wolpin, 1999. "A Quantitative Analysis of Swedish Fertility Dynamics: 1751-1990," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(1), pages 137-165, January.
    9. Doris Hanappi & Valérie-Anne Ryser & Laura Bernardi & Jean-Marie Le Goff, 2017. "Changes in Employment Uncertainty and the Fertility Intention–Realization Link: An Analysis Based on the Swiss Household Panel," European Journal of Population, Springer;European Association for Population Studies, vol. 33(3), pages 381-407, July.
    10. Wilde, Joshua & Chen, Wei & Lohmann, Sophie, 2020. "COVID-19 and the Future of US Fertility: What Can We Learn from Google?," SocArXiv 2bgqs, Center for Open Science.
    11. Oded Galor, 2011. "Unified Growth Theory and Comparative Development," Rivista di Politica Economica, SIPI Spa, issue 2, pages 9-21, April-Jun.
    12. Daron Acemoglu & Suresh Naidu & Pascual Restrepo & James A. Robinson, 2019. "Democracy Does Cause Growth," Journal of Political Economy, University of Chicago Press, vol. 127(1), pages 47-100.
    13. Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 323-350, National Bureau of Economic Research, Inc.
    14. Richard Evans & Yingyao Hu & Zhong Zhao, 2010. "The fertility effect of catastrophe: U.S. hurricane births," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(1), pages 1-36, January.
    15. Vikesh Amin & Jere Behrman, 2014. "Do more-schooled women have fewer children and delay childbearing? Evidence from a sample of US twins," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(1), pages 1-31, January.
    16. A. Sandmo, 1970. "The Effect of Uncertainty on Saving Decisions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 37(3), pages 353-360.
    17. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    18. Jeremy Greenwood & Ananth Seshadri, 2002. "The U.S. Demographic Transition," American Economic Review, American Economic Association, vol. 92(2), pages 153-159, May.
    19. Daniel Aaronson & Fabian Lange & Bhashkar Mazumder, 2014. "Fertility Transitions along the Extensive and Intensive Margins," American Economic Review, American Economic Association, vol. 104(11), pages 3701-3724, November.
    20. Bastien Chabé-Ferret & Paula Eugenia Gobbi, 2018. "Economics Uncertainty and Fertility Cycles: The Case of the Post-WWII Baby Boom," Working Papers ECARES 2018-19, ULB -- Universite Libre de Bruxelles.
    21. de la Croix, David & Pommeret, Aude, 2021. "Childbearing postponement, its option value, and the biological clock," Journal of Economic Theory, Elsevier, vol. 193(C).
    22. Ramey, Valerie A. & Shapiro, Matthew D., 1998. "Costly capital reallocation and the effects of government spending," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 48(1), pages 145-194, June.
    23. Kasey Buckles & Daniel Hungerman & Steven Lugauer, 2021. "Is Fertility a Leading Economic Indicator?," The Economic Journal, Royal Economic Society, vol. 131(634), pages 541-565.
    24. George Hondroyiannis, 2010. "Fertility Determinants and Economic Uncertainty: An Assessment Using European Panel Data," Journal of Family and Economic Issues, Springer, vol. 31(1), pages 33-50, March.
    25. Sibabrata Das & Alex Mourmouras & Peter Rangazas, 2018. "Wage and Fertility Gaps in Dual Economies," Springer Texts in Business and Economics, in: Economic Growth and Development, edition 2, chapter 7, pages 191-227, Springer.
    26. Michele Boldrin & Larry E. Jones, 2002. "Mortality, Fertility, and Saving in a Malthusian Economy," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(4), pages 775-814, October.
    27. Jeremy Greenwood & Nezih Guner & Guillaume Vandenbroucke, 2017. "Family Economics Writ Large," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1346-1434, December.
    28. Axel Dreher, 2006. "Does globalization affect growth? Evidence from a new index of globalization," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1091-1110.
    29. Michael Bar & Oksana Leukhina, 2010. "Demographic Transition and Industrial Revolution: A Macroeconomic Investigation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(2), pages 424-451, April.
    30. Gary S. Becker, 1960. "An Economic Analysis of Fertility," NBER Chapters, in: Demographic and Economic Change in Developed Countries, pages 209-240, National Bureau of Economic Research, Inc.
    31. Ehrlich, Isaac & Kim, Jinyoung, 2005. "Endogenous fertility, mortality and economic growth: Can a Malthusian framework account for the conflicting historical trends in population?," Journal of Asian Economics, Elsevier, vol. 16(5), pages 789-806, October.
    32. Alex Mourmouras & Peter Rangazas, 2009. "Reconciling Kuznets and Habbakuk in a unified growth theory," Journal of Economic Growth, Springer, vol. 14(2), pages 149-181, June.
    33. Solt, Frederick, 2019. "Measuring Income Inequality Across Countries and Over Time: The Standardized World Income Inequality Database," SocArXiv mwnje, Center for Open Science.
    34. Matthias Doepke, 2005. "Child mortality and fertility decline: Does the Barro-Becker model fit the facts?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(2), pages 337-366, June.
    35. Hans-Peter Kohler & Iliana Kohler, 2002. "Fertility Decline in Russia in the Early and Mid 1990s: The Role of Economic Uncertainty and Labour Market Crises," European Journal of Population, Springer;European Association for Population Studies, vol. 18(3), pages 233-262, September.
    36. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    37. Shoumitro Chatterjee & Tom Vogl, 2018. "Escaping Malthus: Economic Growth and Fertility Change in the Developing World," American Economic Review, American Economic Association, vol. 108(6), pages 1440-1467, June.
    38. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, June.
    39. Gary S. Becker & H. Gregg Lewis, 1974. "Interaction between Quantity and Quality of Children," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 81-90, National Bureau of Economic Research, Inc.
    40. Sah, Raaj Kumar, 1991. "The Effects of Child Mortality Changes on Fertility Choice and Parental Welfare," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 582-606, June.
    41. Frederick Solt, 2020. "Measuring Income Inequality Across Countries and Over Time: The Standardized World Income Inequality Database," Social Science Quarterly, Southwestern Social Science Association, vol. 101(3), pages 1183-1199, May.
    42. Sibabrata Das & Alex Mourmouras & Peter Rangazas, 2018. "Economic Growth and Development," Springer Texts in Business and Economics, Springer, edition 2, number 978-3-319-89755-4, April.
    43. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    44. Ehrlich, Isaac & Lui, Francis T, 1991. "Intergenerational Trade, Longevity, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1029-1059, October.
    45. Barro, Robert J & Becker, Gary S, 1989. "Fertility Choice in a Model of Economic Growth," Econometrica, Econometric Society, vol. 57(2), pages 481-501, March.
    46. Niklas Potrafke, 2015. "The Evidence on Globalisation," The World Economy, Wiley Blackwell, vol. 38(3), pages 509-552, March.
    47. Elena Sochirca & Pedro Cunha Neves, 2020. "Optimal policies, middle class development and human capital accumulation under elite rivalry," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 10(4), pages 727-744, December.
    48. Kalemli-Ozcan, Sebnem, 2003. "A stochastic model of mortality, fertility, and human capital investment," Journal of Development Economics, Elsevier, vol. 70(1), pages 103-118, February.
    49. William Lord & Peter Rangazas, 2006. "Fertility and development: the roles of schooling and family production," Journal of Economic Growth, Springer, vol. 11(3), pages 229-261, September.
    50. Oded Galor, 2011. "Unified Growth Theory," Economics Books, Princeton University Press, edition 1, number 9477.
    51. Hayne E. Leland, 1968. "Saving and Uncertainty: The Precautionary Demand for Saving," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 82(3), pages 465-473.
    52. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
    53. Priya Ranjan, 1999. "Fertility Behaviour under Income Uncertainty," European Journal of Population, Springer;European Association for Population Studies, vol. 15(1), pages 25-43, March.
    54. Jeremy Greenwood & Nezih Guner & Guillaume Vandenbroucke, 2017. "Family Economics Writ Large," Working Papers wp2018_1706, CEMFI.
    55. Sommer, Kamila, 2016. "Fertility choice in a life cycle model with idiosyncratic uninsurable earnings risk," Journal of Monetary Economics, Elsevier, vol. 83(C), pages 27-38.
    56. Michaela R. Kreyenfeld, 2005. "Economic uncertainty and fertility postponement: evidence from German panel data," MPIDR Working Papers WP-2005-034, Max Planck Institute for Demographic Research, Rostock, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cem Işık & Ercan Sirakaya-Turk & Serdar Ongan, 2020. "Testing the efficacy of the economic policy uncertainty index on tourism demand in USMCA: Theory and evidence," Tourism Economics, , vol. 26(8), pages 1344-1357, December.
    2. Giray Gozgor, 2020. "The Role of Economic Uncertainty in Rising Populism in the EU," CESifo Working Paper Series 8499, CESifo.
    3. OlaOluwa S. Yaya & Nurudeen Abu & Tayo P. Ogundunmade, 2021. "Economic policy uncertainty in G7 countries: evidence of long-range dependence and cointegration," Economic Change and Restructuring, Springer, vol. 54(2), pages 541-556, May.
    4. Aparajita Dasgupta & Anahita Karandikar & Devvrat Raghav, 2024. "Road Access, Fertility, and Child Health in Rural India," Population and Development Review, The Population Council, Inc., vol. 50(1), pages 117-147, March.
    5. Joan E. Madia & Francesco Moscone & Asieh Hosseini Tabaghdehi & Jong-Chol An & Changkeun Lee, 2024. "Fertility Decline and Tax Revenues in South Korea," FBK-IRVAPP Working Papers 2024-02, Research Institute for the Evaluation of Public Policies (IRVAPP), Bruno Kessler Foundation.
    6. Michaela Kreyenfeld & Dirk Konietzka & Philippe Lambert & Vincent Jerald Ramos, 2023. "Second Birth Fertility in Germany: Social Class, Gender, and the Role of Economic Uncertainty," European Journal of Population, Springer;European Association for Population Studies, vol. 39(1), pages 1-27, December.
    7. Canh Phuc Nguyen & Christophe Schinckus & Thanh Dinh Su, 2020. "Economic policy uncertainty and demand for international tourism: An empirical study," Tourism Economics, , vol. 26(8), pages 1415-1430, December.
    8. Sven A. Hartmann, 2024. "Television and family demography: Evidence from a natural experiment in East Germany," IAAEU Discussion Papers 202407, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    9. Giray Gozgor, 2022. "The role of economic uncertainty in the rise of EU populism," Public Choice, Springer, vol. 190(1), pages 229-246, January.
    10. David E. Bloom & Michael Kuhn & Klaus Prettner, 2024. "Fertility in High-Income Countries: Trends, Patterns, Determinants, and Consequences," Annual Review of Economics, Annual Reviews, vol. 16(1), pages 159-184, August.
    11. Kreyenfeld, Michaela & Konietzka, Dirk & Lambert, Philippe & Ramos, Vincent Jerald, 2022. "Second Birth Fertility in Germany: Social Class, Gender, and the Role of Economic Uncertainty," LIDAM Discussion Papers ISBA 2022023, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Adams, Jonathan J., 2022. "Urbanization, long-run growth, and the demographic transition," Journal of Demographic Economics, Cambridge University Press, vol. 88(1), pages 31-77, March.
    2. Yin, Yongkun, 2023. "China’s demographic transition: A quantitative analysis," European Economic Review, Elsevier, vol. 160(C).
    3. Jeremy Greenwood & Nezih Guner & Guillaume Vandenbroucke, 2017. "Family Economics Writ Large," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1346-1434, December.
    4. Jakob Madsen & Holger Strulik, 2023. "Testing unified growth theory: Technological progress and the child quantity‐quality tradeoff," Quantitative Economics, Econometric Society, vol. 14(1), pages 235-275, January.
    5. Dong-Hyeon Kim & Shu-Chin Lin, 2024. "Fertility and the oil curse," Empirical Economics, Springer, vol. 67(2), pages 381-416, August.
    6. Jeremy Greenwood & Nezih Guner & Guillaume Vandenbroucke, 2017. "Family Economics Writ Large," Working Papers wp2018_1706, CEMFI.
    7. Nguyen Thang Dao & Julio Dávila & Angela Greulich, 2021. "The education gender gap and the demographic transition in developing countries," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(2), pages 431-474, April.
    8. Dierk Herzer & Holger Strulik & Sebastian Vollmer, 2012. "The long-run determinants of fertility: one century of demographic change 1900–1999," Journal of Economic Growth, Springer, vol. 17(4), pages 357-385, December.
    9. Sunha Myong & JungJae Park & Junjian Yi, 2021. "Social Norms and Fertility," Journal of the European Economic Association, European Economic Association, vol. 19(5), pages 2429-2466.
    10. Michael Bar & Oksana Leukhina, 2010. "Demographic Transition and Industrial Revolution: A Macroeconomic Investigation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(2), pages 424-451, April.
    11. Abebe HAILEMARIAM, 2024. "Income and differential fertility: evidence from oil price shocks," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 90(1), pages 31-54, March.
    12. Bloom, D.E. & Luca, D.L., 2016. "The Global Demography of Aging," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 3-56, Elsevier.
    13. Larry E. Jones & Alice Schoonbroodt, 2010. "Complements Versus Substitutes And Trends In Fertility Choice In Dynastic Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(3), pages 671-699, August.
    14. d'Albis, Hippolyte & Greulich, Angela & Ponthiere, Gregory, 2018. "Development, fertility and childbearing age: A Unified Growth Theory," Journal of Economic Theory, Elsevier, vol. 177(C), pages 461-494.
    15. Anthony Mveyange, 2015. "On the fertility transition in Africa: Income, child mortality, or education?," WIDER Working Paper Series 089, World Institute for Development Economic Research (UNU-WIDER).
    16. Marla Ripoll & Juan Carlos Cordoba, 2011. "A Contribution to the Economic Theory of Fertility," 2011 Meeting Papers 1207, Society for Economic Dynamics.
    17. Batten, Jonathan A. & Bilgin, Mehmet Huseyin & Demir, Ender & Gozgor, Giray, 2023. "Does globalization affect credit market controls?," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 21-43.
    18. Oded Galor, 2012. "The demographic transition: causes and consequences," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 6(1), pages 1-28, January.
    19. Cordoba, Juan Carlos & Ripoll, Marla, 2012. "Barro-Becker with Credit Frictions," Staff General Research Papers Archive 35531, Iowa State University, Department of Economics.
    20. Luca GORI & Enrico LUPI & Piero MANFREDI & Mauro SODINI, 2020. "A Contribution to the Theory of Economic Development and the Demographic Transition: Fertility Reversal under the HIV Epidemic," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 86(2), pages 125-155, June.

    More about this item

    Keywords

    Fertility; Uncertainty; WUI Index; Precautionary Saving; Business Cycle; Panel Data Estimation Techniques;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:glodps:360. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/glabode.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.