The Easterlin Hypothesis

Abstract

Easterlin formulates one of the most popular fertility theories. He supports that fertility follows some regular cycles, with large birth cohorts producing small cohorts, and vice versa. There are two complementary aspects in this theory: the effect of the relative number of the young adults (relative cohort size), and the effect of the wages and unemployment (relative income); the second one being a subjacent mechanism to the first one. Thus, individuals from a large cohort face up to the deterioration of their standard of living relative to their parents. They will make then adjustments to preserve the comparative positions and therefore their material aspirations, particularly adjustments in family life such as the decline in fertility. Thus, the induced fertility by the large cohort effects makes this one reverse the next cohort size.