The economics of the reproduction 'crisis' in transition Europe : the effect of shifts in values, income and uncertainty (with special reference to Russia)
This thesis investigates the causes for the abrupt, universal and virtually unprecedented decline in the total fertility rate in transition Europe. Using evidence from Russia, it tests two competing hypotheses on the fertility decline: the demographic and economic hypotheses. Empirical findings can be summarized as follows: I find insufficient support for the demographic hypothesis-the fertility decline in Russia cannot satisfactorily be explained by a simultaneous shift in values and attitudes towards reproduction and timing of births. In contrast, I provide preliminary cross-regional evidence to support the economic hypothesis-regions with the largest fall in (the proxy for) income and large uncertainty experienced the largest declines in the fertility rates. This result is consistent with Becker's economic model of reproductive behaviour, insofar as it establishes a positive relationship between changes in income and fertility. It however introduces an additional explanatory variable: people's perception of uncertainty. In a preliminary attempt to reconcile the standard economic model with these findings, a simple model of households' reproductive decision is developed. It shows that each household tends to postpone the decision for an incremental child, whenever there is widespread uncertainty. It suggests that, if the individual decision to procrastinate is replicated over a large number of households, it can lead to an aggregate, short-term fall in the fertility rate. Provided that conclusions for the transition European region can be drawn from the Russian evidence, this inquiry shows that fertility has declined in response to a lower income and higher uncertainty: it reflects the deterioration in the quality of life and a loss in welfare. Thus, it is a strong negative indicator of the transition process.