The Easterlin hypothesis (Easterlin 1961, 1969, 1973) states that the positive relationship between
income and fertility
Income and fertility is the association between monetary gain on one hand, and the tendency to produce offspring on the other. There is generally an inverse correlation between income and the total fertility rate within and between nations. The h ...
is dependent on relative income. It is considered the first viable and a still leading explanation for
mid-twentieth century baby booms.
The hypothesis as formulated by
Richard Easterlin
Richard Ainley Easterlin (born 12 January 1926) is a professor of economics at the University of Southern California. He is best known for the economic theory named after him, the Easterlin paradox. Another of his contributions is the Easterl ...
presumes that material aspirations are determined by experiences rooted in family background: he assumes first that young couples try to achieve a
standard of living
Standard of living is the level of income, comforts and services available, generally applied to a society or location, rather than to an individual. Standard of living is relevant because it is considered to contribute to an individual's quality ...
equal to or better than they had when they grew up. This is called "relative status". If income is high relative to aspirations and jobs are plentiful, it will be easier to marry young and have more children and still match that standard of living. But when jobs are scarce, couples who try to keep that standard of living will wait to get married and have fewer children. Children are
normal goods
In economics, a normal good is a type of a good which experiences an increase in demand due to an increase in income, unlike inferior goods, for which the opposite is observed. When there is an increase in a person's income, for example due to a w ...
once this influence of family background is controlled. For Easterlin, the size of the cohort is a critical determinant of how easy it is to get a good job. A small cohort means less competition, a large cohort means more competition to worry about. The assumptions blend
economics
Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services.
Economics focuses on the behaviour and intera ...
and
sociology
Sociology is a social science that focuses on society, human social behavior, patterns of Interpersonal ties, social relationships, social interaction, and aspects of culture associated with everyday life. It uses various methods of Empirical ...
.
Easterlin's hypothesis can also be used for further predictions of the fertility rate. Easterlin expected a new fertility boom beginning in the 1980s.
[Easterlin RA. 1979. What will 1984 be like? Socioeconomic implications of recent twists in age structure ''Demography'', 15: 397-432. DOI: 10.2307/2061197]
References
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Fertility
Demographic economics