The importance of economic development, female employment and family policies related to fertility in OECD countries

Angela Luci, Institut National d'Études Démographiques (INED)
Olivier Thevenon, Institut National d'Études Démographiques (INED)

We are concerned about the importance of economic development related to fertility in OECD countries. Knowing about the J-shaped relationship between the human development index (HDI) and total fertility rates that was recently found by Myrskylä, Kohler and Billari (2009), we single out the impact of economic development on fertility. We empirically test the hypothesis of a convex impact of GDP per capita on fertility, using data from the OECD area that spans the years 1960 to 2007. The empirical results confirm our hypothesis of a U-shaped pattern between economic development and fertility. We designate a clear turning point in the relationship between economic development and fertility at a fertility level of 1,5 children per woman. We find that economic development is a driving factor for the fertility rebound in many OECD countries, but is not sufficient to explain fertility variations over time and across all OECD countries. By decomposing GDP per capita in several variables and by controlling for tempo-effects due to birth postponement, we identify female employment as a major determinant of the fertility rebound that can recently be observed in several OECD countries.