Optimal fertility

Erich Striessnig, Wittgenstein Centre (IIASA, VID/ÖAW, WU)
Wolfgang Lutz, International Institute for Applied Systems Analysis (IIASA)

In this paper we challenge the widespread notion that replacement level fertility is the most desirable level of fertility both for countries currently above and below this level. We first discuss possible alternative criteria for choosing one fertility level over another. Dismissing for the time being the two extreme criteria of ever increasing national strength (which would imply unlimited population growth) and preservation of the environment (which would see human numbers converge to zero), we focus on age dependency as the sole criterion. But we do so by relaxing the strong assumption that all individuals of a given age are equal in terms of their economic contribution to society and introduce education as probably the most relevant observable source of population heterogeneity. Our criterion variable is the education weighted support ratio and we perform thousands of alternative simulations for different constant levels of fertility starting from empirically given populations. If education is assumed to present a cost at young age and results in higher productivity during working age then for most countries the optimal long-term total fertility rate turns out to be well below replacement level.