Optimal Fertility

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

In this paper we challenge the widespread notion that replacement level fertility is the optimal fertility level for any country. We first discuss possible criteria for choosing one fertility level over another. Dismissing the two extreme criteria of ever increasing national strength and preservation of the environment without human interference in this paper we focus on age dependency as the sole criterion. But we do so by relaxing the strong assumption of homogeneity of age groups and introduce education as the most relevant observable source of population heterogeneity. Our criterion variable is the education weighted support ratio. We perform thousands of alternative simulations for different 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 the optimal long term TFR turns out to be below replacement fertility.