Demographic-economic paradox

The demographic-economic paradox is the inverse correlation found between wealth and fertility. The term 'paradox' comes from the notion that greater means would necessitate the production of more offspring as suggested by the influential Thomas Malthus. Roughly speaking, nations with higher GDP per capita are observed to have fewer children, even though a richer population can support more children.

Malthus held that in order to prevent widespread suffering, from famine for example, what he called 'moral restraint' (which included abstinence) was required. The demographic-economic paradox suggests that reproductive restraint arises naturally as a consequence of economic progress.

It is hypothesized that the observed trend has come about as a response to increased life expectancy, reduced childhood mortality, development of birth control, improved female literacy and independence, and urbanization that all result from increased GDP per capita, consistent with the demographic transition model.

Demographic transition
Before the 19th century demographic transition of the western world, less than 20% of children would survive to the age of 10, and life expectancies were short even for those who reached adulthood. Birth rates were correspondingly high, resulting in slow population growth. The agricultural revolution and improvements in hygiene then brought about dramatic reductions in mortality rates in wealthy industrialized countries, initially without affecting birth rates. In the 20th century, birth rates of industrialized countries began to fall, as societies became accustomed to the higher probability that their children would survive them. Cultural value changes were also contributors, as urbanization and female employment rose.

Since wealth is what drives this demographic transition, it follows that nations that lag behind in wealth also lag behind in this demographic transition. The developing world's equivalent Green Revolution did not begin until the mid-twentieth century. This creates the existing spread in fertility rates as a function of GDP per capita.

Religion
Another contributor to the demographic-economic paradox may be religion. Religious societies tend to have higher birth rates than secular ones, and richer, more educated nations tend to advance secularization. This may help explain the Israeli and Saudi Arabian exceptions, the two notable outliers in the graph of fertility versus GDP per capita at the top of this article. In American media it is widely believed that America is also an exception to global trends. The current fertility rate in America is 2.09, higher than most other developed countries, |5 |6 but not as exceptional as Saudi Arabia and Israel. This may be due to the United States having a high percentage of religious followers compared to Europe as a whole.|6

The role of different religions in determining family size is complex. For example, the Catholic countries of southern Europe traditionally had a much higher fertility rate than was the case in Protestant northern Europe. However, economic growth in Spain, Italy, etc, has been accompanied by a particularly sharp fall in the fertility rate, to a level below that of the Protestant north. This suggests that the demographic-economic paradox applies more strongly in Catholic countries. It remains to be seen if the fertility rate among (mostly Catholic) Hispanics in the US will follow a similar pattern.

Another possible explanation for the "American exception" is its much higher rate of teenage pregnancies, particularly in the southern US, compared to other countries with effective sexual education; this does not contradict the religious-beliefs hypothesis.

In his book America Alone: The End of the World as We Know It, Mark Steyn asserts that the United States has higher fertility rates because of its greater economic freedom compared to other industrialized countries. However, the countries with the highest assessed economic freedom, Hong Kong and Singapore, have significantly lower birthrates than the United States. According to the Index of Economic Freedom, Hong Kong is the most economically free country in the world. Hong Kong also has the world's lowest birth rate.

Consequences
A reduction in fertility can lead to an ageing population which leads to a variety of problems, see for example the demography of Japan.

A related concern is that high birth rates tend to place a greater burden of child rearing and education on populations already struggling with poverty. Consequently, inequality lowers average education and hampers economic growth.