The reach of fertility decline: a longitudinal analysis of human capital gains across generations

Abstract

AbstractThe impact of fertility decline on economic development remains central to population studies. Recent scholarship emphasizes parental investment in education as a mediator. We further develop the theoretical foundation, and empirical evidence, for the role of child health—specifically how fertility changes promote children’s physical and cognitive development and thereby complement human capital accumulation through educational gains. We test this using a two-generation model applied to Indonesian longitudinal data from 1993 to 2015. Characteristics of modern fertility regimes—older maternal ages, longer interpregnancy intervals, and lower average birth orders—generally benefit offspring cognitive development and schooling. We estimate that family planning expansion, and the resulting shift in fertility traits, induced an average increase of 0.34 years of offspring educational attainment by age 18 years. Maximal maternal educational and family planning expansion would jointly produce a 1.12-year gain, including 0.20 years more directly attributable to fertility shifts. Evidence is strengthened in parallel simulations from models of within-mother shifts, in which fertility shifts resulted in a 0.16-year gain in offspring schooling. Findings contribute new evidence for the rounding effects of women’s education and family planning expansion on human capital formation through child health within families and across generations.