Ashley S- Link Between Fertility and Economic Growth?

Although Estonia showed a strong relationship between an increasing fertility rate and an increasing GDP per capita, the same cannot be said for the world as a whole. By looking at every country that records their data, it can be said that countries who have a lower fertility rate tend to have a higher GDP per capita, whereas countries with a higher fertility rate have a lower GDP per capita. This being said, in 2011, there was a -0.44 correlation worldwide between fertility rates and GDP per capita. Comparing Estonia and the worldwide data, it could be said that there are compounding variables that are influencing the relationship (or no relationship) between fertility rates and the GDP per capita. 

Click here to watch this graph in motion!

Countries who spend more money per person on healthcare tend to receive benefits others would not experience. The higher spending usually means that everyone receives a many health benefits with a great healthcare system. But could Estonia's health expenditures between 1995 and 2010 show a positive relationship with their fertility rate? 

The answer is yes. By comparing Estonia's health expenditure per capita with their fertility rate, it is shown that there is definitely a positive correlation. To be exact, this correlation is 0.955, which shows that there is a strong positive correlation between the two variables. This could mean that with an increasing health expenditure per capita could cause the GDP per capita to rise as well.  

A country's GDP is representative of not only the economic growth experienced during a timeframe, it also demonstrates a country's standard of living. But the same question of whether or not there is a confounding variable that influences the data haunts Estonia's GDP per capita. Could Estonia's GDP per capita actually be influenced by the adjusted net national income?

The answer here is also yes. There is a strong positive correlation, at 0.981, between an increasing adjusted national net income and GDP per capita. Because of this strong correlation between net national income and GDP per capita, it could also be theorized that an increasing net national income could also have an effect on an increasing fertility rate.  

So in the end, it cannot 100% proven that an increasing fertility rate directly determines a country's GDP per capita. Not every country is the same, which can be seen by comparing Estonia's graph in the first post to the animated graph in this post.

Personally, I agree with the points that Jonathan Last brings up in his article about how an increase in fertility rates means that there are more people to innovate, which leads to an increase in GDP per capita and a larger work force. Though at this point, I am just not sure as to how much of an influence a rising fertility rate has on a country's GDP. To make Last's theory true, I feel as though a country has to already have a strong financial backbone (like Estonia) for a factor like fertility rates to have an impact on which way the GDP moves. So in countries in the European Union, rising fertility rates could in time increase their GDPs per capita, but in places like Africa and Asia, we still have a long way to go financially before we can link fertility rates to their financial success.

Ashley S - Fertility and Economic Growth in Estonia

With a population of 1,274,709 (July 2012), Estonia has seen an increase in GDP per capita. In addition to the increase in GDP, the country has also experienced a rise in fertility rates. According to Jonathan Last, a country's economic growth is dependent on the nation's fertility rate. Last states that when there is a lower fertility rate, "a country does not innovate and tends to spend more money on healthcare"and eventually causes a "decrease in the labor force." Keeping this in mind, if a country wants to sustain economic growth, they must first have a steady increase in fertility rates. But is this theory true? To test Jonathan Last's theory, I will look at Estonia's numbers, which will hopefully help to prove this theory true or false.

Estonia is a Baltic Nation that was once part of the Soviet Union until it declared its freedom on 20 August 1991. Once Estonia left the USSR, the country was free to experience economic growth as an independent nation for the first time since 1939. According to data gathered by the World Bank, in 1995, Estonia's GDP per capita was $6,314.84 and in 2012, the GDP per capita was $21,200. In only seventeen years, their GDP per capita has declined once, in 2009, where the GDP per capita experienced a $2,594.94 decline. Despite the decline, they have continued to always have an increase, even after 2009.

GDP Per Capita, PPP (Current International $, 1995-2010)

For the past seventeen years, the fertility rate in Estonia has constantly fluctuated  between 1.2 children and 1.7 children. Historically, Estonia's all time high since 1960 was 1987 and 1988 where there were 2.26 children per family, while Estonia was still part of the Soviet Union. But since then, the fertility rate experienced by Estonia has been on the decline since then, where they experience their lowest fertility rate in country history in 1997 at 1.24. Despite their period of decline from 1988 until 1997, Estonia has bounced back significantly since then. Currently, the fertility rate has been slowly rising, where in 2010, the fertility rate was 1.63.

Fertility Rate (1995-2010)

By looking at the data, it is hard to imagine whether or not the fertility rate has an affect of the GDP per capita of Estonia, especially with the fluctuations in numbers. To determine if GDP per capita growth is dependent on an increasing fertility rate, using a scatter plot will help to show the correlation between the two variables.

As shown by the linear trendline, an fertility rate does usually translate into an increasing GDP per capita. The correlation coefficient of the data shows that there is a 0.9808 correlation between Estonia's fertility rate and their GDP per capita. This is a very strong association between the two variables, so this could prove Last's thesis right. Taking into account this trend, I think that Estonia's fertility rate will continue to slowly increase and its GDP per capita will continue to increase as well.