Analysing the economic determinants of fertility rates across EU member states

Abstract

One of the most crucial issues being faced by most industrialised societies is the presence of low fertility rates. The significant decline in fertility, being faced by all 27 European Union member states has been a crucial issue, mainly due to the possibility of a population crisis. Declining fertility levels threaten economic growth, as the elderly population rises whilst the working age population decreases. Meanwhile, governments must allocate more resources to pension funding and health care. The main aim of this dissertation is to analyse the main determinants of fertility rates for the 27 European Union member states, covering the period between 2007-2018. This twelve-year period is analysed by employing a panel regression. The main results found in this study suggest that fertility rates are impacted by changes in infant mortality rates, economic growth and unemployment levels, whereas the impact that female employment has on fertility seems to have become positive and weaker in recent years. This study finds a strong association between periods of economic slowdown and dips in fertility rates. This emphasises the importance of employing policy measures during periods of uncertainty and rising unemployment levels, in order to reduce labour market instability and the impact that this will eventually have on global economic output.