On the interaction between socioeconomic development and fertility rate: A cross‐country analysis

• Published date: 01 May 2022
• Author: Naveed Ali,Shahid Ali,Fazli Rabbi,Hazrat Bilal
• Date: 01 May 2022
• DOI: http://doi.org/10.1002/pa.2366

ACADEMIC PAPER

On the interaction between socioeconomic development and

fertility rate: A cross-country analysis

Naveed Ali

1

| Shahid Ali

1

| Fazli Rabbi

1

| Hazrat Bilal

1,2

1

Department of Economics, University of

Swat, Kanju Township, Pakistan

2

Center for Business Management, University

of Swat, Kanju Township, Pakistan

Correspondence

Shahid Ali, Department of Economics,

University of Swat, PO Box 19130, Kanju

Township, Swat, Mingora, Khyber

Pakhtunkhwa, Pakistan.

Email: shahid_aerc@yahoo.com

This paper investigates the relationship between socioeconomic development, popu-

lation policies, and fertility decline for a sample of 138 countries for the period of

1960–2016. Moreover, this study analyzes the determinants of fertility rate for the

sample countries. It is found that a drastic demographic transition decline in crude

birth rate for the different classified group of countries from 1960 to 2016. Further-

more, it is noted that as compare to least developed countries the average annual

population growth percent of developed countries is very low. However, there is a

demographic transition of different classified group of countries for the year 2000

and 2016 in developing countries as well. The results of panel estimation technique

show that fertility rate depends on female labor force participation, infant mortality

rate, real income, and female education.

1|INTRODUCTION

Demographics play a key role in the socioeconomic development of a

country; however, the relationship between demographics and socio-

economic development is often ignored. The debate has been regard-

ing the population policies and its impact on socioeconomic

development of countries. The research on demographics mainly con-

centrates on the declining rate of fertility in the west, and offers

explanations for the currently trending phenomena (Hanks, 2006). A

bulk of qualitative and quantitative research studies are available

regarding the declining rates of fertility in the developed world. How-

ever, the issue of fertility rate in developing countries is neglected by

the empiricists. The fear about the likely demographic changes is

extensively expressed in the literature and social media (Hanks, 2006).

Population explosion is one of the factors that differentiate the

developed world from the developing world. The difference is due to

the dissimilar fertility rate in developed and developing countries

(Todaro & Smith, 2003). The issue of population growth is intensively

felt in the middle of the 20th century. In the next cycle of five

decades, fertility rate will drastically decline in many countries despite

the huge socioeconomic differences in these countries. However,

contrary to the developed world, the decline in fertility rate in devel-

oping countries is much faster as the decline in developed countries is

gradual (Karra, Canning, & Wilde, 2017).

Fertility has declined very markedly in many developing countries

including Pakistan.

1

This decline in fertility is attributed to key socio-

economic, cultural, and environmental factors. The optimal population

size of a country determines not only the current economic growth of

a country, but it also ensures the future growth prospects of a nation.

Over the past 50 years, the Asian countries, in general, and Pakistan,

in particular, have experienced “Demographic Transition.

2

”The

pioneering work in this regard was carried out by Notestein (1945).

According to him, during demographic transition, high birth rate and

declining death rates result in population rise. In Japan, Korea, and

OECD countries,

3

over the past few decades, total fertility rate has

drastically declined. The fertility rate in Japan, Korea, and Southern

European countries is extremely low at 1.3 children per woman. Many

developed countries in Europe are confronted with rapid aging of the

population, which will result in declining size of their population in the

future. Population aging has economic and financial consequences for

the nations. On the one hand, reproductive potential of women

decreases, and, on the other, it puts pressure on government budgets

in such countries. Moreover, demographic transition may affect the

economic growth; as flow of young and energetic labor force slows

down, employment and pool of domestic savings decrease, which

declines productive investment (Burniaux et al., 2004). Asian countries

have experienced the rapid demographic transition a few decades

before, as a consequent population is declining (Narayan, 2006).

Received: 7 July 2020 Revised: 25 July 2020 Accepted: 5 August 2020

DOI: 10.1002/pa.2366

J Public Affairs. 2022;22:e2366. wileyonlinelibrary.com/journal/pa © 2020 John Wiley & Sons Ltd 1of6

https://doi.org/10.1002/pa.2366