Fertility Behaviour under Income Uncertainty
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This paper develops a two-period stochastic model of fertility behaviour to provide a possible explanation for the recent sharp decline in birth rates in the former Soviet Republics and Eastern European countries. Due to the existence of irreversibilities associated with the childbearing decision and the option of postponing childbearing for a later time, it may be optimal for individuals to postpone childbearing during times of increased income uncertainty.
KeywordsBirth Rate European Country Stochastic Model Public Finance Sharp Decline
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