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Policy Concerns in an Era of Low Fertility: The Role of Social Comparisons and Intensive Parenting

Author

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  • Lukas Mahler

  • Michéle Tertilt

  • Minchul Yum

Abstract

The global fertility rate has reached a record low, with nearly half of all countries now below replacement level. This has sparked renewed interest among policymakers and researchers alike. In this paper, we explore a novel explanation for low birth rates based on comparison motives. We show theoretically that strong comparison motives lead to high parental investments---both in time and money---and low fertility. We further show that comparison motives can amplify fertility declines driven by other forces. We provide suggestive empirical support for the role of comparison motives in explaining cross-country and within-U.S. regional variation in fertility. The resulting policy implications are different from those usually considered. Specifically, high-stakes testing in the education system may heighten comparison motives and thereby contribute to fertility decline. Banning or taxing certain types of private education institutions could reduce excessive parental investment and thereby stimulate fertility.

Suggested Citation

  • Lukas Mahler & Michéle Tertilt & Minchul Yum, 2025. "Policy Concerns in an Era of Low Fertility: The Role of Social Comparisons and Intensive Parenting," CRC TR 224 Discussion Paper Series crctr224_2025_705, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2025_705
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp705
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    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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