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The economic explanation of fertility changes in the United States.

Abstract It is widely assumed that fertility varies positively with economic conditions. Actually this assumption receives little support from the historical record. For a century before 1930 fertility declined while the economy expanded and real incomes rose. Then for nearly three decades fertility and incomes fell and rose together. Since 1960 they have again moved in opposite directions. Clearly, no simple generalization about their relation will hold water. More sophisticated explanations are based on relative rather than absolute incomes. Banks suggested that the downturn in English fertility in the 1870's might have occurred because standards of middle-class consumption rose faster than middle-class incomes, but he found the evidence inconclusive. To reconcile the post-war baby boom in the United States with earlier experience, Easterlin has argued that fertility is determined by the relationship between the income of couples in their twenties and the income of their parents ten to fifteen years earlier. Among the weaknesses of this theory as applied to U.S. experience are its failure to explain the sharp drop in fertility, including that of native white urban women, in the 1920's; the fact that fertility rose most in the baby boom at the higher socio-economic levels where incomes rose least; and the sharp decline of fertility after 1962 in spite of the favourable trend of incomes, including those of younger people. The broad conclusion is that while couples no doubt do consider income, employment opportunities, etc. in deciding how many children to have, such considerations have had a relatively minor influence on changes in fertility, which for the most part have been the result of changes in attitudes. Even the post-war baby boom was a result not only of higher incomes and full employment but also of a shift in attitudes toward family size, particularly among the better-educated, economically better-off sections of society.