3. Literature Review
3.1 Low Fertility in the 20 th Century
3.1.1 Theoretical Explanations for Low Fertility
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serious fertility decline and population growth rates nearing zero, particularly in Western and Northern European nations (Chesnais, 1996; Legge Jr & Alford, 1986). Even in southern Europe, where Mediterranean countries are commonly understood to have “traditional, Catholic, and family oriented” societies valuing larger family sizes, fertility has been at sub-replacement levels since the 1990s (Chesnais, 1996, p. 729). Today, low fertility remains pervasive throughout Europe and poses a serious demographic problem in North America and East Asia. Despite the widespread nature of this trend, the literature explaining low fertility trends remains divided, ranging from sociological or cultural arguments based on industrial modernization to
microeconomic household theories.
3.1.1 Theoretical Explanations for Low Fertility. Theoretical explanations for low
fertility in developed countries vary widely, blaming industrial modernization, microeconomic household theories, and even values-based trends that defy direct state intervention. Below, I have organized current and historical fertility theories into three categories: modern transition theory, the economic model of fertility, and other sundry approaches. Although I only list these three headings, throughout history, many scholars have attempted to summarize their
understandings of population into fertility theories; these three segments simply represent the most politically and academically significant theories of fertility decline over the past two hundred years.
Demographic Transition Theory. Demographic transition (DT) theory, also known as
modern transition theory, has its roots in a nineteenth century Malthusian approach to fertility decline popularized in Europe and the United States. This theory links voluntary lower fertility with expanded economic opportunity for social mobility. DT theory flourished in the beginning of the twentieth century, as the European demographic transition from a high mortality-high
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fertility region to low mortality-low fertility one slowed. Key proponents include Davis (1945), Notestein (1945) and Landry (1987). DT theory claims that fertility decline arises from the
“structural transformation of the economic and social systems generated by the industrial revolution,” given inevitable shifts in cultural norms, values, and socioeconomic classes that arise due to industrialization (Demeny, 1986, p. 343). In early industrialization stages, fertility is high and uncontrolled and mortality is declining because of increasing quality of life. For
example, the industrialization improves food availability, public health, urbanization, agriculture, and contraceptive technologies, among other factors (Szreter, 1993).
Demographic transition theory has been the predominant theory used to explain fertility trends in policymaking (Demeny, 1986), and the correlation between fertility decline and socioeconomic development at the national level is well accepted. This theory, however,
assumes that industrialization’s population effects are mainly economic, and does not recognize the role of social changes like gender equity or labor force participation (Demeny, 1986; Zaidi &
Morgan, 2017). In addition, it fails to account for the role of migration in population size. The second demographic transition framework is an extension of demographic transition theory for already low-fertility countries, put forth in the 1980s by Lesthaeghe and van de Kaa (Van de Kaa, 1987; Zaidi & Morgan, 2017). It attributes the sub-replacement fertility of industrialized countries in North America and Western Europe to complete control of fertility, and childbearing is influenced by factors like the popularity of contraceptives and increased female labor force participation (Van de Kaa, 1987, 2001). Further, its proponents argue that childbearing decisions increasingly depend on value-based, rather than purely economic, factors (Zaidi & Morgan, 2017).
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The Economic Model. During the 1960s, the school of new household economics1
emerged to rival the explanatory power of demographic transition theory regarding fertility decisions. On a foundation of microeconomic analysis and statistical evidence, rather than normative assumptions, this model understands fertility by placing children in a household economic framework. In his earliest analysis of fertility, Becker (1960) explains that children may be consumed as a source of “psychic income or utility,” and that past a certain age they may also contribute pecuniary income to the family, thus acting as a productive good (Becker, 1960, p. 213). Becker’s later works further develop theories on the allocation of time at the household level, speaking of opportunity cost of childbearing. That cost is the foregone earnings that parents sacrifice, as measured by “the amount of time used per dollar of goods and the cost of unit per time” (Becker, 1965, p. 503). Becker theorizes that households in richer countries forfeit earnings in exchange for psychic income gained by having and raising children. Since childcare is not monetarily productive, its relative opportunity cost is higher for families enjoying higher incomes.
Critics of this microeconomic model argue that it emphasizes empirical data to the exclusion of significant cultural, social, and historical influences on fertility (Demeny, 1986).
While Demeny (1986) also claims that “policy applications of the findings from the new types of [microeconomic] analyses were scarce,” today we see that many pronatal policies actually do rely on the concept of the lowering the financial cost of children to incentivize fertility (p. 344).
Rational choice theory is a variant of the economic model, related to, and often studied in conjunction with new household economics vis-à-vis fertility. Childbearing is defined as a purely rational economic decision, determined by strict cost-benefit analysis, and influenced by parental
1 This school of fertility theory is also known as new home economics theory (Gauthier, 2007).
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income constraints and consumer preferences. McDonald (2002) notes that the benefits of
children are psychological rather than economic, especially in societies where elder care does not remain within the family. He thus categorizes children as consumption instead of investment goods. Gauthier (2007) separates the cost of children into direct and indirect categories, with indirect costs as the foregone (monetary) earnings given up during the childbearing/rearing process; these are equivalent to Becker’s opportunity cost of childbearing. Direct costs, on the other hand, are “the actual dollar expenditure on the child less any financial benefits” received by parents because of the child or children, such as financial transfers, tax exemptions, or subsidized child services (McDonald, 2002, p. 424). The direct cost of children may affect later order births more significantly than indirect costs, which level as the number of children increases, and may primarily affect first-order births.
One caveat to the concept of the psychological value of children is the effect of birth order on perceived benefits of the child. McDonald (2002) writes:
Having the first child provides benefits including the status of being a parent, “being a family”, having offspring who will carry on the family, meeting the expectations of others, having a baby who will be fun and will grow up and love you, fulfilling childhood dreams, or providing vicarious pleasure from the child's success. The decision to have a second child may be more related to the strength of the notion that each child should have at least one sibling or the desire for a child of the other sex. Those who have a third child may value at least three children as a “real” family, or they may be still trying for a child of the sex that they don’t have … It is likely that the level of the net psychological benefits threshold falls as birth order rise… [and] that the level of the threshold falls as people get older (p. 422-23).
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According to rational choice fertility theory, decreasing the cost of children or increasing parental income through pronatal policy should increase demand for children. Because raising the psychological benefits of children is not within the scope of policy, the welfare state approach lowers the costs of children through financial transfers, the tax system, or subsidized services (McDonald, 2002, p. 424). As seen above, however, theoretically policy may affect birth spacing more than overall fertility, by incentivizing earlier childbearing rather than having more children (Gauthier, 2007).
Gauthier (2007) observes five main assumptions of the economic model of fertility. (1) An increase in income is expected to increase demand for children; (2) Parents and individuals have complete information about the cost of childbearing and births and perfectly planned; (3) Marriage and childbearing are economically rational choices; (4) Policies may impact fertility by decreasing the cost of children or increasing parental income; (5) Childbearing preferences are homogenous among the family or household. Two key criticisms of the economic model involve the first and fifth points. Regarding the first assumption, an increase in income could increase the quality of children rather than the quantity. This means expenditure on children could rise (e.g.
more expensive education, extracurricular development, health care) and increase the overall cost of children, keeping the demand for children low. The fifth assumption reveals that the economic model ignores the role of gender dynamics in fertility. If the demand for children is heterogeneous in the household, then local gender dynamics may affect how pronatal policy influences childbearing.
Risk aversion theory describes another facet of rational choice theory, minus the
assumption that individuals and households have perfect information on the costs and benefits of childbearing. Without that assumption, couples consider children a source of potential economic,
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interpersonal, or romantic risk. For example, childbearing almost guarantees a period of lower income, delayed return to the workforce by one or both parents, and higher consumption costs (McDonald, 2002). The best, and possibly the only, policy solution according to this theory is the welfare state approach, which lowers risk of childbearing throughout economic and social
spheres for citizens in general.
Additional Approaches. In the literature, there are several other notable theories of
fertility change. Easterlin (1975) proposes a cyclical pattern of fertility that fluctuates between baby booms and low fertility periods. Fertility reflects relative income in this theory, meaning that couples will try to achieve a minimum standard of living that is equal to or higher than that of their childhood. Childbearing trends are predicated upon expected/realized economic wealth and subject to spontaneous recovery of higher fertility, decreasing the need for pronatal state interventions (Demeny, 1986).
Post-materialist fertility theory suggests that a sustained level of development in wealthy countries has caused an ideational shift from materialism to self-realization. When values such as personal growth, liberalism, and individual freedom are celebrated over traditional family values, fertility decreases. Post-materialist values theory dovetails with second demographic transition theory. As previously mentioned, second demographic transition theory proposes a post-WWII decoupling of marriage and procreation in advanced countries, which, along with increasingly available contraceptive technologies, leads to below-replacement fertility. It is assumed that shifting ideational systems prompt these changing demographic patterns (Van de Kaa, 2001;
Zaidi & Morgan, 2017).
McDonald (2002) suggests that reason for this discrepancy is the unaddressed issue of gender equity in childbearing decisions. His gender equity theory of fertility divides society into
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individual-oriented institutions (i.e. education and market employment) and family-oriented institutions (e.g. social security, the industrial complex). In advanced modern societies, he claims, gender equity is high and rising within education systems and the much of the labor force. That said, the traditional male breadwinner model still prevails as the foundation of many family-oriented institutions, and if children are present, obliges women to be caretakers and men economic providers within traditional heterosexual relationships (McDonald, 2002).
Childbearing limits the increased economic and career opportunities afforded to women by rising gender equity, and women likewise limit their fertility. This theory of fertility explains the low fertility of traditional patriarchal societies such as southern Europe and Japan well, where there is a large discrepancy of gender equity between individual and family systems.