Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/235395 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9025
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
In this paper, we conduct an empirical study of how uncertainty alters fertility behavior. The precautionary motive for saving predicts that an increase in income uncertainty increases saving by reducing both consumption and fertility. We examine this prediction using a new measure of economic uncertainty, the World Uncertainty Index and focus on data from 126 countries for the period from 1996 to 2017. The empirical findings indicate that uncertainty decreases the fertility rate, as suggested by theory. This evidence is robust to different model specifications and econometric techniques as well as to the inclusion of various controls. The evidence also indicates that changes in uncertainty may be a factor explaining why fertility is pro-cyclical.
Subjects: 
fertility
uncertainty
WUI Index
precautionary saving
business cycle
panel data estimation techniques
JEL: 
J13
D81
D14
E32
C33
Document Type: 
Working Paper
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