On the Determinants of Fertility: Evidence from Developing and Developed Countries

The literature on fertility has proposed variuos factors that could affect fertility, and various fertility models have been developed, including the endogenous fertlity framework. These analsyes are often conducted based on observations from the developed, and mostly Western, world. Since developing countries could differ along economic and cultural lines, the adequacy of these models for developing countries is unclear. This paper studies the determinants of fertility in a panel of 150 developing and developed nations using annal date between 1985-2013. To conduct the analyses, I use instrumental variables to account for the potential bi-directional causality between fertilty and female labor force participation as well as the Arellano-Bond estimator. The paper finds clear differences between these two groups. Income per capita and female labor-force participation positively affect fertility of the developed countries, but they do not have robust effects on fertility in the developing world. On the other hand, the mortality rate is very significant for explaining fertility in developing countries. In particular, higher mortality rates lead to higher total fertility rates. This paper, thus, suggests that standard models of endogenous fertility that are centered around female labor supply may be ill-suited to explain fertility in developing countries and that the mortality rate remains key determinant of fertility for this group. A possible explanation for this result is that the typical economic considerations that people in developed countries make with respect to fertility are not, in general, equally relevant for developing nations. As such, more adequate models of fertility should be designed to explain the behavior of fertility in developing countries.