A reconsideration of Easterlin cycles

Abstract

In the aftermath of World War II the United States found itself in a position of unexpected economic strength and confronting a resurgence in births quite beyond what demographers had come to consider reasonable for a developed country. It has taken nearly 30 years for fertility to become ‘reasonable’ again, and its interim course had seemed to call for exceptional efforts at interpretation. The best known and most respected of these efforts is Richard Easterlin's, which sees cohort fertility as directly related to cohort incomes in early adult life, indexed on parental incomes, and cohort incomes as inversely related to cohort sizes. Under some circumstances the mechanism is said to generate long swings in annual numbers of births.

This paper takes issue with the Easterlin model, both as regards the actual course of fertility and the ability of Easterlin's concept of ‘relative incomes’ to explain the observed patterns. We find that cohort fertility behaviour has tended not to be stable throughout life, that at young ages it has not shown the expected relationship to relative income and that relative income has not shown the expected relationship to cohort size. Reasons for the failure of the model are suggested, and a largely conventional explanation of fertility changes is offered in its place.