FERTILITY DETERMINANTS AND ECONOMIC UNCERTAINTY: AN
ASSESSMENT USING EUROPEAN PANEL DATA
Bank of Greece and Harokopio University
This paper examines the determinants of fertility, using panel data for twenty-seven European countries. We employ panel co-integration to estimate fertility as function of demographic and economic variables. We show that low fertility in most industrialized countries in Europe is due to low infant mortality rates, high female employment, low nuptiality rate and high opportunity cost of having children. Using two measures of economic uncertainty, which are associated with labor market decisions - a production (an output) volatility measure and the unemployment rate - we examine to what extent economic insecurities affect fertility decisions. The empirical results show that both measures of economic uncertainty have a significant negative impact on fertility implying that labor market insecurities might be a significant factor affecting fertility decisions.
Keywords: Fertility Choice; Panel Estimation,
JEL clasification: J13, C22, 040, 057
Acknowledgements: I wish to acknowledge useful discussions and suggestions with Stephen Hall and Heather Gibson. The views expressed in this paper are those of the author and not those of the Bank of Greece. All errors and deficiencies are the responsibility of the author.
Economic Research Department
Bank of Greece, 21, E. Venizelos Ave.,
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