Explaining Fertility Variation in Twentieth Century Sweden

This paper aims at explaining medium-term fertility variations in twentieth century Sweden by relating the total fertility rate to macro-level economic change and gender-specific changes in economic factors relevant to women’s childbearing behaviour. Economic theory is combined with a structural analytical approach in the multivariate time series analysis of the determinants of fertility. A model, which combines the New Home Economics approach and Easterlin’s relative income theory with indicators of business cycle variation and structural economic change, is estimated. The results suggest a new interpretation of fertility change in which indicators of the business cycle and the relative demand for women’s labour prove to be significant. Female-to-male relative wages have a strong effect on fertility, although not in a straightforward way. In 1975, a pattern of counter-cyclical fertility is reversed into one of pro-cyclical fertility as a strong negative price effect turns into a positive income effect. Business cycle indicators have strong effects, and so has a measure of structural change that serves as a determinant of fertility variation mainly through a reformulation of the gender division of labour in times of economic transformation and through demand-induced changes in the price of women’s time.