Demographic Forecasting and the Easterlin Hypothesis

A model for forecasting fertility fluctuations in a population that is highly urbanized has low mortality and contracepts effectively is described. Based on the research of Easterlin which questions whether fertility and age distribution can be forecast separately it exploits a strong observed association of age-specific fertility and population size and structure. Population size and age structure are hypothesized to affect relative income through the mechanisms of pressure on limited resources. It is the comparison of income with expectations or aspirations that matters in the relationship. There will thus be a positive relationship between fertility and relative income and a negative one between age group size and income. Taken together these suggest that fertility and cohort size should be inversely related; which association forms the basis for the model. This is contrary to the usual assumption for forecasting in the U.S. i.e. that fertility rates are independent of population size and age structure. Though the model has not yet been well tested and still depnds on many subjective decisions it does help to identify the long run level of fertility by placing current experience in perspective. The ability to forecast fluctuations in fertility and age structure will demographers believe be increasingly important and will have major policy implications. When applied to the U.S. the model indicates that current fertility is only temporarily low and an upturn should occur after 5 or 10 years.