Could Labor Productivity Explain the Fertility Rebound in the Developed World?

Abstract The developed world has been gradually moving towards a lower level of working hours and higher incomes during the post-war era. This is reflected in countries’ increasing levels of labor productivity (Gross Domestic Product per hour worked). Although time spent at work and earnings are critical in fertility decisions, the potential fallout of the outlined evolution on fertility rates has remained relatively unexplored. Employing quantile regression analysis for the period 1970–2010 at varying levels of economic development, we find a non-linear (convex) relationship between labor productivity and fertility. The effect of productivity increases with economic advances, which, as we show, highlights the crucial role of female labor force participation. It peaks at the fertility distribution where individuals of older reproductive ages (30–49) work, on average, longer hours. These findings indicate that rising labor productivity may have contributed to the fertility rebound observed in the early 21st century.