Intergenerational Transmission of Preference for Children, the Fertility Transition, and Economic Growth

This paper presents an analysis of long-term effects of intergenerational transmission of fertility behavior as a proxy of culture in an overlapping generations setting. For this analysis, the fertility norm faced by a generation is assumed to derive from the preceding generation’s fertility behavior, as reflected in the number of siblings. The norm costs are represented as the disutility incurred from deviating from the norms. Starting from a high fertility rate, such a norm displays a monotonic downward fertility transition. The fertility rate converges to a long-term equilibrium fertility rate, whereas the norms only affect fertility transitions. Regarding fertility transition, although a child policy such as a childcare-cost subsidy might increase the fertility rate temporarily, it cannot reverse a downward (or upward) time trend of the fertility rate. Because the long-term fertility rate coincides with the non-norm equilibrium, the child policy must be such that it can affect the non-norm fertility rate. The Japanese experience implies that fertility norms are important gradients in evaluating fertility transitions.