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

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Listed:
  • Mahler, Lukas
  • Tertilt, Michèle
  • Yum, Minchul

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

  • Mahler, Lukas & Tertilt, Michèle & Yum, Minchul, 2025. "Policy Concerns in an Era of Low Fertility: The Role of Social Comparisons and Intensive Parenting," CEPR Discussion Papers 20767, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:20767
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    Cited by:

    1. is not listed on IDEAS
    2. Sagiri Kitao & Kanato Nakakuni, 2023. "On the Trends of Technology, Family Formation, and Women's Time Allocation," CAMA Working Papers 2023-54, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.

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    Keywords

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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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