Academic journal article The European Journal of Comparative Economics

Education and Fertility: A Comparative Micro-Econometric Analysis in Europe

Academic journal article The European Journal of Comparative Economics

Education and Fertility: A Comparative Micro-Econometric Analysis in Europe

Article excerpt

1. Introduction

The objective of this paper is that of further investigating the existing relationship between human capital and decisions concerning fertility for most European countries. For this aim we control for demographic, social and economic conditions, by using the European Community Household Panel (ECHP) dataset over the period 1994-2001. The main aim is that of comparing the effect of education and the completed fertility in 9 countries: Austria, Belgium, Denmark, Finland, Greece, Italy, Portugal, Spain and the UK. As we observe in the Table 1, the above countries are characterized by a different dynamics of the total fertility rate in the period 1994-2001. In particular, Belgium and Portugal present a nearly constant trend whereas Denmark, Austria, Finland and the U.K. show a U-shaped dynamics, though based on a different magnitude, with a minimum registered in the second half of 90's. Finally Greece, Italy and Spain show a roughly decreasing trend.

At the same time, a remarkable rise in woman education may be observed in these countries (3). In order to shed some light on the relation between education proxied by the age at which the highest level of education has been completed and the completed fertility, we analyse the main factors which may affect this economic link. This topic is very relevant for the economic theory. The human capital of individuals is increasing with increasing education levels, while population growth may be increasing with a different trend of fertility. Thus the growth rate of aggregate human capital as a whole is not as fast as it would be if the population grew at a constant rate. This effect might have some important implications for economic growth in the long run.

The remainder of the paper is organized as follows. Section 2 presents the review of the literature. Section 3 explains the theoretical framework that motivates the empirical strategy. Section 4 details the data and it describes the empirical model to be estimated. Section 5 shows the results, while section 6 concludes.

2. Literature

This paper deals with the quantity-quality trade-off assumption in the economic theory of fertility (Becker, 1960). This theory argues that while an overall increase in household income may be expected to increase the demand for children (i. e. quantity of children), it may instead lead to an increase in the cost of children (i. e. quality of children) (Becker and Lewis, 1973). Thus, parents should choose between a large number of children and a smaller number of children of better 'quality'. Since high education is a proxy of the opportunity to find a good occupation and a high income, we may assume a negative correlation between education and 'quantity' of children. This theory might explain the decrease in fertility in industrialized countries. The analysis of relation between education and fertility is very interesting for its relevant implications in terms of economic growth (Becker, Murphy and Tamura, 1990; Tamura, 1994). A large number of studies explore the existing relationship between fertility decisions and human capital. In between the others Michael (1973) gives an explanation to the observed negative correlation between parental educational level and fertility; more particularly he analyses the channels through which human capital influences fertility decisions and how education may affect them. Ben Porath (1973) underlines how parents' education may affect couples' productivities in child care. Moreover, Kalwij (2000) studies the effects of female employment status on the existence and quantity of children across households in the Netherlands, finding that higher educated women plan to have children later in their life compared to lower ones; as a consequence, they have a lower probability of having a child and have fewer children. Huinink (2001), analyzing the role of women's educational attainment for the transition towards a second child, for some European countries, finds evidence that in West Germany there is, among college graduate women, a high share of childless ones, and a high share of women with two or more children. …

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