The changing relationship between fertility and economic development: evidence from 256 sub-national European regions between 1996 to 2010

Jon Fox, Freie Universität Berlin
Sebastian Kluesener, Max Planck Institute for Demographic Research
Mikko Myrskylä, London School of Economics and Political Science (LSE)

The assertion that as the economic development increases fertility tends to decline has been challenged in recent years with papers examining cross-country trends. This paper builds on that research by studying the sub-national regional level. This allows for identification of both the regional effects, as well as controlling for those time-varying, country-level effects that so often confound results. Using a fixed effects model with country-by-year effects, results indicate that at per capita income levels of about 20,000 Euros, a 1 percent change in per capita real GDP results in about a 0.19 drop in a region’s TFR. However, if per capita income grows to 40,000 Euros, then a 1 percent change in per capita GDP results in about a 0.12 increase in a region’s TFR. These findings support the existence of this convex fertility-income relationship, but suggest that it takes very high levels of per capita income to reach it.