Tuesday 11
Gregory Ponthiere
› 11:00 - 11:30 (30min)
› 405
Fertility choice: the role of social externalities
Ratbek Dzhumashev  1@  , Ainura Tursunalieva  2@  
1 : Dept of Economics, Monash University  -  Website
2 : Swinburne University of Technology

This paper extends the modeling of fertility choice by incorporating the effect
of social externalities defined by three factors: the average levels of consumption,
fertility rate, and human capital in a society. The extended model
explains the following patterns in aggregate data that are inconsistent with the
existing theories: (1) The observed decline in fertility is too steep to be fully
explained by the trade-off between the quantity and quality of children caused
by income growth, (2) the relationship between income and fertility is shifting
over time, and (3) the decline in fertility reverses at high levels of income. To
test whether the effect of social externalities on fertility choice holds at the micro
level, the predictions of the model are confronted with fertility survey data
from the United States. The empirical results fully support the predictions of
the theoretical model. The insights gained from the extended model provide
a basis for enhanced understanding of fertility choice, an important factor that
drives long-term growth and environmental sustainability.

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