the impact macroeconomic instability on the fertility rate in Iranian provinces

اقتصاد و توسعه منطقه ای

Article 2, Volume 22, Issue 10, March 2016, Pages 1-15   

Document Type: مقالات پژوهشی

DOI: 10.22067/erd.v22i10.45526

Author

zahra afshari^*

alzahra university

Abstract

Extended Abstract
Introduction
The fertility transition in Iran has pass through different stages from 1972-2015.The total fertility rate (TFR) decreased from 7.7 in 1966 to around 6 in 1976.Then it rose to 7 in 1980.TFR decline to 5.5 in 1988.In 1996,thetotal fertility rate reach to 2.8,more than 50% decline. TFR has declined further and reached 2.17 in 2000, and 1.9 in 2012 i.e. below replacement rate (Abbasi-Shavazi, et.al, 2006). Moreover the figures reveal that in 2012, in 26 out of 30 provinces of Iran TFR was below replacement rate. Fertility reduction in Iran is unique in speed of decline. The socio- economic planners believe that the decreasing pattern of total fertility rate in Iran may have adverse effect on socio- economic development of Iran, exploring the determinants of sharp decline in total fertility rate is crucial.
Theoretical frame work
Most analyses of childbearing decisions have their root in the economic model pioneered by Becker (1960) and Leibenstein (1957), where demand for children is a function of their costs and of individuals’ preferences, for a given income. Underlying this model is the notion that children are a special type of capital good, i.e. a long-lived asset that produces a flow of services that enter the utility function of parents.
There are many socio- economic candidates for explaining this trend, including socio-economic development. Furthermore,Several key strategies contributed to rapid fertility decline ,including the role of women,the public education campaigns, population family planning , economic instability.
Methodology
This article provides a framework for analyzing the impact of macroeconomic instability on TFR in Iranian provinces through a panel data econometric model for the 2006-2012 periods. For this purpose two key determinant of business cycles, i.e. the rates of unemployment and GDP per capita growth were used. The model is elaborated with the Eviews 7 software package. First, the Limer test accept the panel data versus pooled data. Second, Hausman test reject random effect versus the fixed effect.
Results & Discussion
The results reveal that total fertility rate was moved positively with the rate of growth of per capita income, and negatively with unemployment rate. Therefore ttotal fertility rate revealed a procyclical behavior in the provinces of Iran. These results confirm the Pennsylvanian school of thoughts. Becker (1981) argue that the rise in income induces the fertility decline, because the positive income effect that is generated by increase in income is dominated by rising opportunity cost of children. In Iran economic instability that mirrored on two digit unemployment rate during the period under consideration, postpone the marriage and child bearing time to an appropriate economic situation, can be consider as a major explanatory factor for the high speed of total fertility rate in Iran. This is consistent with the results by other authors in other countries (Sobotka T, et.al,2011, Adsera and Menendez, 2011) Moreover, the model shows a positive relationship between female labor force participation and fertility in Iranian provinces during the period under consideration.Various authors(Nourouzi, Ladan, 2008, Mehregan, Nader ,et al, 2010) find a negative correlation between labor force participation of women and total fertiliy rate in Iran , but our findings based on provincial data reveals that this correlation turened to a positive value . This result is consistent with The evidences from OECD countries (Ahn and Mira,2002,,Bettio and Villa, 1998, Engelhardt and Prskawetz, 2004). These authors show that the countries that have lowest level of total fertility rate are those with relatively low levels of female labor force participation rates.
Our findings show a significant negative relationship between GDP per capita and fertility in Iranian provinces, Economic development through increasing the women higher education, increased the female labor force participation rate. Increasing the share of women with higher education, postpone the marriage age of woman and restructure the decision making within the family, decrease total fertility rate. We may conclude that economic development through increasing the share of women with higher education, and the average age of women in first marriage tend to decreased total fertility rate, which confirm the Leibenstein modernization school.
Conclusions & Suggestions
In Iran, from one hand, hand, the signs of movement toward a developed countries (i.e. GDP per capita growth, Educational progress especially among women, labor force participation of women) is apparent. These progresses caused TFR to decline. On the other hand the planners believe that the current trend of fertility is a burden to sustainable development in Iran. Therefore, the policies should be directed toward an optimal total fertility rate. The results indicates that unemployment is not only has a negative impact on the current family income, but also is a treat for future employment of the family. The unemployment persistence, increase the age of marriage, postpone child bearing, and the number of children. Therefore, unemployment not only affect the timing of fertility, but also decrease TFR. Therefore, with respect to the important role of economic instability on total fertility rate, implementing policies that stabilized the economy is required .Moreover, with respect to irreversible nature of development, in order to diminish the adverse effect of this process on total fertility rate, labor regulations should move toward a family supportive regulations. , otherwise the current fertility trend will be unavoidable.

Keywords

fertility; GDP per capita growth; the labor force participation of women

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