Lower Fertility Rates Boost Economic Growth and Poverty Reduction in Low-Income Countries

A new working paper by Monica Das Gupta, John Bongaarts and John Cleland argues that there is now a broad consensus among researchers that lower fertility rates facilitate economic growth in low-income countries.

Low dependency ratios (resulting from lower fertility rates) create a window of opportunity for savings and increase productivity and investment — which, if properly managed by policy makers, can permanently transform living standards. The more rapid the fertility decline in a region, the wider the window of opportunity, though its duration will be shorter, because the population will age more rapidly.

The studies reviewed also indicate that rapid population growth can be a constraint on economic growth, especially in poor countries with policies that don’t encourage rapid rise in productivity. In addition, lower fertility is associated with better child health and schooling, reduced maternal mortality and morbidity, a higher rate of labor participation by women, and higher household earnings.

Studies reviewed by the authors also highlight the deep challenges to managing common environmental property resources, because of diverging interests among users. But the pressure on these resources can be mitigated by reducing the rate of population growth. Although family planning programs are only one policy lever to help reduce fertility, most studies find them effective. Such programs might help the Sub-Saharan African region in particular, where high fertility rates and institutional constraints on economic growth have combined to slow rises in living standards.

Extracted from WorldBank