Chapter 7 The economics of fertility in developed countries

This chapter describes the intellectual development and the empirical implications of the literature on the economics of fertility as it applies to fertility behavior in developed economies. The chapter reviews the literature on dynamic models of fertility behavior over the parents' life cycle, and outlines the ways in which these models extend the static models and the implications that they provide for dimensions of fertility behavior. The chapter also discusses various solutions to the fundamental identification problems that arise in assessing the impact of prices and income on both lifetime and lifecycle fertility behavior. The theory and econometric methods are better developed than the empirical literature. The challenge is to find plausibly exogenous variation in proxies for the price and income concepts appearing in the theories. The chapter provides a taxonomy of possible identifying information and gives hope that additional progress can be made in advancing the empirical understanding of fertility behavior.