Income inequality-fertility nexus: Do differing levels of economic development matter?

University of Dar es Salaam

Abstract

The economically more developed countries (EMDCs) are conjectured to differ from the less developed countries (LDCs) in terms of the link between income, income inequality and fertility, given their differing levels of economic development. This paper examined this view by revisiting the link between income inequality and fertility for 48 Sub-Sahara African countries (mainly LDCs), and 38 Organisation for Economic Cooperation and Development (OECD) countries (mainly EMDCs), covering the period 2000–2020, using the system generalized method of moments (GMM). The results indicate that the effects of income inequality and income on fertility are positive in both groups of countries, and even more significant in the OECD countries. Likewise, the direction of the relationship between level of education, contraceptive usage, labour participation rate and health expenditure with fertility are similar for SSA and OECD countries. The findings suggest that the differing level of development of the LDCs and EMDCs may not be crucial in the link between income inequality and fertility.