Babies and the Macroeconomy

By Claudia Goldin. From NPR's Planet Money.

"Countries around the world have seen a jaw-dropping decline in fertility rates. In this paper, Claudia Goldin, the 2023 winner of the Nobel Prize in economic sciences, offers a new theory to help explain why (listen to The Indicator's conversation with her back in 2021). Goldin starts by providing a good summary of the economics literature on this subject, which points to reasons like the advent of birth control pills and contraceptives. Goldin adds another factor into the mix to explain why some countries have seen a more precipitous decline in birth rates and others have only seen slower declines: the speed of economic growth.

Goldin hypothesizes that countries that experienced rapid economic growth in the 1960s and 1970s — like Greece, Italy, Japan, Korea, Portugal, and Spain — saw bigger and faster declines in fertility because of the way rapid economic growth catapulted them into modernity and upset traditional gender roles. Basically, women go into the workforce, and that changes their desires to have lots of kids because now they're more focused on their careers. And that change especially creates conflict between the genders in societies that just previously were more agricultural and had old-fashioned gender roles.

"Rapid economic growth has given women greater freedoms," Goldin writes. "But rapid economic change may lead to conflicts of various types when men are more swayed by traditions. What women require of men's time to raise a family and be members of a modern labor market may exceed the time their more tradition-bound spouses, or future spouses, are willing to offer. Household and caring tasks in such societies are largely women's responsibilities.

In societies that experience more slow and steady economic growth, Goldin suggests, this change is less sudden and men and women can more slowly work out a deal where they share more of the child-rearing responsibilities. That may help keep the fertility rate from falling as much. Link to paper"

Related posts:

The Economy Affects The Birth Rate (2010)

Did The Recession Help Lower The Birth Rate? (2011)

U.S. Fertility Rate Hits Lowest Level on Record (2012) 

A number of women who put off having babies after the 2007-09 recession are forgoing them altogether; more educated women and student debt also contribute to decline in birth rates (2018)

Births in U.S. Drop to Levels Not Seen Since 1979 (2021)

U.S. Population Growth, an Economic Driver, Grinds to a Halt: Covid-19 pandemic compounds years of birth-rate decline, puts America’s demographic health at risk (2021) 

Worldwide Efforts to Reverse the Baby Shortage Are Falling Flat: Subsidized minivans, no income taxes: Countries have rolled out a range of benefits to encourage bigger families, with no luck (2024)