The Role of Socio-political and Economic Factors in Fertility Decline: A Cross-country Analysis

In this paper, we have examined the fertility transition across countries in four different income categories from social, economic, political and population policy perspectives. We examine whether and how social, economic, political and population policy factors contribute to the decline in fertility rates in countries with different income levels, and our findings suggest that these factors can have very different effects on fertility rates in these countries. Political freedom is found to play a role in shaping people’s perceptions of fertility and has different effects on fertility for countries in different income categories. Worsening political freedom in Upper Middle-income countries exerts downward pressure on fertility rates, while it contributes a positive effect to fertility rates in Lower Middle- and Low-income countries. Urbanization, if implemented successfully, can be an effective approach to further reduce the fertility rate for countries with lower income levels and higher rural populations. Population policies, measured by the contraception prevalence rate, have been found to be effective in reducing the TFR in Upper Middle-income, Lower Middle-income and Low-income countries. From the intra-country analysis, population policies are confirmed to be the main tool used by China and Bangladesh to cut down their TFR. Human capital is confirmed to be one of the most important determinants in explaining the decline in fertility rates across all income categories. The significant policy implication of these findings for policy makers in those Lower Middle-income and Low-income countries is to invest more in education which can have a notable impact on people’s perceptions of fertility, and eventually this could help to effectively reduce their fertility levels in a more natural way than could be achieved by aggressive population policies.