Low fertility: theories and empirical evidence

Korea's economic growth is the most significant event in the history of economic development in the twentieth century. The total fertility rate of Korea sharply declined during the same period, from 6.0 in 1960 to 1.2 in 2010. This low fertility rate poses concerns for Korea which experiences fastest growing aging population in OECD. The objective of this study is to examine the determinants of the fertility rate in Korea based on the household production function approach. It is postulated that as income increases, there is a greater demand for children. At the same time, since child rearing uses mother's time intensively, the relative cost of having children rises, and the utility maximizing couple shifts away from the relatively more costly to less costly sources of utility and demand for children decreases. This study suggests the negative substitution effect has outweighed the positive income effect on fertility rate in Korea. We employ a multiple regression model to determine the explanatory variables on total fertility rate. Cross-section and time series data are used to conduct a panel data analysis. The implication of this framework is that the economic approach illuminates the opposite effects of Korea's economic progress on the fertility behavior.

It has been argued that generous family policy aiming at a gender equal division of childcare and economic responsibility will have a positive impact on childbearing. In this study we ask whether different usages of parental leave are related to continued childbearing and whether there has been a policy effect on fertility behaviour from introducing the father’s quota in the Nordic countries. The major argument for why gender equality in parental leave use would increase fertility is that a more equal division in the household would ease women’s work burden at home and thus enhance the degree of compatibility between childrearing and female employment, thereby making it easier to realize childbearing plans. In order to distinguish causality in effects from selection we will use the natural experiment of the introduction of the father’s quotas in Iceland, Norway and Sweden.

No demographic theory could predict such changes as emergence of lowest-low fertility in Southern-Eastern Europe and is expansion to Eastern Asia. While the TFR of Japan hit the bottom at 1.26 in 2005, Korea recorded 1.08 in 2005 and Taiwan 0.895 in 2010. An ad-hoc interpretation is that such extremely low fertility was caused by the Confucian family pattern. While Europe and Japan are classified into the offspring of feudal family, the Confucian family pattern is very different from Northern-Western European family pattern. While below replacement fertility is natural response to socio-economic changes in post-modern era, the impact on fertility differs by family patterns. It could be said that the more distant the family pattern is from Northern-Western Europe, the lower the TFR goes down. A cultural deterministic view is presented referring to comparative studies on history, civilization and value changes.

This paper discusses the links between parenthood, happiness and policies, taking a comparative perspective. Its motivation derives from recent analysis suggesting a positive relationship between happiness and fertility. Taking a multilevel approach, we find that parental happiness, and thus wellbeing associated with childbearing, depends on a series of country characteristics – ranging from economic prosperity, trust, social capital and gender equality. We reflect on its policy implications and highlight the fact that direct measures of child friendliness, such as the supply of public childcare – though important – appear to matter less than for instance gender equality.

Several macroeconomic studies suggest that fertility starts to re-increase with income in highly developed countries. We propose a deeper insight in the mechanisms behind income and fertility in highly developed countries by focusing on individual fertility decisions linked to education, individual and household income. First, we empirically test whether an U-shaped pattern between income and fertility can be confirmed for micro panel data in European countries. Second, we analyze whether increases in education, in women’s wage income and in their partners’ wage income have a higher impact on quantum- or on tempo- aspects of fertility. We investigate how birth postponement is affected by ‘social status’ in France and find important differences between income groups in terms of timing of births. Finally, we discuss policy implications of our results.