Munich Personal RePEc Archive

Declining Fertility in Europe – An Economic Appraisal

Honekamp, Ivonne (2008): Declining Fertility in Europe – An Economic Appraisal.

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Abstract

Demographic change can be observed throughout Europe. A bulk of literature has focused on ways to mitigate the consequences of ageing by reforming existing institutions of the welfare state. Another way to alleviate the long-run consequences of an ageing population is to re-verse the demographic development by increasing the fertility rate. This is the subject this paper is about. It offers a short review about existing approaches analysing the factors which influence individual’s decision to have children. Firstly, an outline of the potential effects of the increasing dependency ratio on the welfare state and economic growth is provided. Spe-cial attention is paid to the development in Germany which is one of the countries most se-verely affected by low fertility. Furthermore, different theoretical approaches are described which attempt to explain why couples choose to have fewer children today. Lastly empirical work is considered which shows how policy changes affect fertility and that those findings are not always in line with economic theory.

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