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What Accounts for the Emergence of Malthusian Fertility in Transition Economies?

  • Maja B. Micevska

    (Center for Development Research University of Bonn)

  • Paul J. Zak

    (Claremont Graduate University)

The transition to market-oriented economies in Central and Eastern Europe and the former Soviet Union in the 1990s, like the Great Depression in the U.S. and Germany in the 1930s, generated sharp declines in real incomes and a corresponding drop in fertility. This is contrary to the robust negative relationship between income and fertility that has been extensively documented. This paper presents a theoretical model that explains the positive relationship between fertility and income. The model predicts that: i) the perceived level of subsistence consumption fundamentally determines whether fertility and income are positively or negatively related; ii) once incomes decline below a threshold, declining labor income causes fertility to fall; and iii) rising income inequality has a negative impact on fertility rates. Empirical tests using both aggregate and microeconomic data provide strong support for the predictions of the model. Our empirics predict that the perceived subsistence level is a statistically significant determinant of fertility and that the average country in our sample will remain in a Mathusian fertility regime for twenty more years.

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Paper provided by Claremont Colleges in its series Claremont Colleges Working Papers with number 2002-01.

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Date of creation: Feb 2002
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Handle: RePEc:clm:clmeco:2002-01
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  1. Barro, Robert J, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 407-43, May.
  2. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
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  5. Galor, Oded & Weil, David, 1995. "The Gender Gap, Fertility and Growth," CEPR Discussion Papers 1157, C.E.P.R. Discussion Papers.
  6. Owen, Ann L. & Weil, David N., 1998. "Intergenerational earnings mobility, inequality and growth," Journal of Monetary Economics, Elsevier, vol. 41(1), pages 71-104, February.
  7. Azariadis, Costas, 1996. " The Economics of Poverty Traps: Part One: Complete Markets," Journal of Economic Growth, Springer, vol. 1(4), pages 449-96, December.
  8. Richard M. Auty & Pat McGregor, 1995. "Economic growth, inequality and poverty: An analysis of policy in a two period framework," Journal of International Development, John Wiley & Sons, Ltd., vol. 7(4), pages 619-635, 07.
  9. Stokey, Nancy L & Rebelo, Sergio, 1995. "Growth Effects of Flat-Rate Taxes," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 519-50, June.
  10. Barro, Robert J, 2000. " Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
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