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Lost Generations? Fertility and Economic Growth in Europe

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  • Serhan Cevik

    (International Monetary Fund, 700 19th Street, NW Washington, DC 20431, USA)

Abstract

The total fertility rate - the average number of births per woman - in Europe currently stands at 1.46, well below the replacement level of 2.1 required for population stability. Persistently low fertility, together with rapid population aging, has important social and economic consequences. This paper examines the causal effect of below-replacement fertility on income per capita growth using a panel of 42 European countries over 1960?2022. To address en-dogeneity arising from reverse causality, I implement an instrumental variable approach, exploiting exogenous variation in the comparative abortion index as an instrument for fertility. The results reveal a significant positive effect of fertility on real GDP per capita growth, implying that declining fertility acts as a substantial drag on income growth. These findings underscore the economic significance of demographic trends and provide insights for policy measures aimed at mitigating the long-term consequences of low fertility on economic performance.

Suggested Citation

  • Serhan Cevik, 2026. "Lost Generations? Fertility and Economic Growth in Europe," Annals of Economics and Finance, Society for AEF, vol. 27(2), pages 495-513, November.
    • Handle: RePEc:cuf:journl:y:2026:v:27:i:2:cevik
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    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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