A nudge (nudge) is better than a wink (or money)

Bargaining over Babies: Theory, Evidence, and Policy Implications
by Matthias Doepke, Fabian Kindermann – #22072 (CH EFG)

It takes a woman and a man to make a baby. This fact suggests that for a birth to take place, the parents should first agree on wanting a child. Using newly available data on fertility preferences and outcomes, we show that indeed, babies are likely to arrive only if both parents desire one, and there are many couples who disagree on having babies. We then build a bargaining model of fertility choice and match the model to data from a set of European countries with very low fertility rates. The distribution of the burden of child care between mothers and fathers turns out to be a key determinant of fertility. A policy that lowers the child care burden specifically on mothers can be more than twice as effective at increasing the fertility rate compared to a general child subsidy.

Commonsense really. And no surprise that fertility levels are falling in Mediterranean cultures which (I think) have not taken kindly to marketised childcare.

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paul walter
paul walter
5 years ago

Nor is the the thread starter a surprise, given the sterility and lack of imagination that goes with public policy regarding social infrastructure as an investment rather than a penalty on the supposedly more productive, like Rupert Murdoch, on behalf of the shirking classes.

I suppose it comes down to what you think people are, society is or could or should be; what you think the end purpose of society, people, politics and economics could turn out to be about.

Quiggin writes a lot on this sort of stuff too and sometimes the demoralisation of the long distance observer comes through with him. I wonder that our best and brightest, knowing what they know, continue their fight rather than opting out after “trying to make a difference”, like an academic I know who has finally quit a taxing job at the coal face of tribulation, aboriginal policy and the efforts required to get it to work, in this “grind ’em down” era.

Pappinbarra Fox
Pappinbarra Fox
5 years ago

… and say na more.
But I’d suggest that this only applies to westernised economically advanced societies. Those considerations probably do not enter the mind of other “less energy consumptive advanced consumer societies.” Having said that why would we want to have policies that increase fertility? We have an economy and we have an ecology and ne’er the twain shall meet – until catastrophe forces a reconsideration of those paradigms.

Paul Norton
Paul Norton
5 years ago

Here are some findings from a quiet morning of research I did last year:

1. Of the 20 countries with the highest UN Humen Development Index (HDI) only one has above-replacement fertility rates (Israel, for reasons endemic to that country IMHO).

2. The average fertility rate in the 101 countries with a HDI of 0.700 or above is 1.98 (i.e. below replacement level.

3. The average fertility rate in the 49 countries with a HDI of 0.800 or above is 1.68.

4. There is a very strong negative correlation between HDI and fertility rate for all 184 countries for which both variables could be determined; however

5. There is no correlation whatsoever between the two variables in those countries with a HDI => 0.800.

The variations in fertility between nations with a HDI => 0.800 seem to strongly reflect the factors identified in the study cited in the OP, as well as others that have been identified in the literature over the past 20-30 years, specifically that countries adopting a social democratic welfare policy paradigm that supports women combining work and parenting have higher fertility rates – particularly among mature women – than countries such as the Mediterranean societies, Japan, RoK, etc., that have adopted a conservative welfare policy paradigm that valorises single breadwinner families and is hostile to women combining work and parenting.

Paul Norton
Paul Norton
5 years ago

*Human* Development Index.

conrad
conrad
5 years ago

I agree with much of what you note Paul, but there are exceptions — for example, HK, Singapore, and Macau, the countries with the lowest birth rates of all. These countries don’t have great welfare policies, but domestic (foreign) helpers are cheap, which for many of us would be better than all of the tax policies combined. Of course, these countries have crazy work hours (for everyone, male or female), and terrible housing which I suspect are the big problems.

Also, I’m not sure what to make of it, but it’s not clear to me that it is _policy_ which causes the low birth rate in some Mediterranean societies, but the culture itself (the two are obviously overlapped somewhat). For example, when I was in Germany, I was astounded by how equitably men/women shared child care duties compared to other places (for example, it is possible to go to parks and see more fathers with their children than mothers), which is very unlike, say, Italy (or here for that matter). So no matter what the policies, it is probably harder to have children for females in Italy than Germany.

So if Germany isn’t as inequitable as Italy, I wondered what causes their low birth rate. If I dig around the sociological explanations that they have in Germany for the low birth rate (generally untestable), then one of them is that once many people don’t have children, it becomes more socially acceptable not to have children. So perhaps Germany started off with poor policies (no school one day a week, like France, if I remember correctly), but now it may simply be that people don’t want children anymore, in which case policy would have little effect, and this is what leads to their large number of childless adults. I think this is different to Aus where this variable has also gone up, but things like finding partners are more important for what is curtailing our birth rate from being close to replacement.