The low fertility trap hypothesis: Forces that may lead to further postponement and fewer births in Europe

This paper starts from the assessment that there is no good theory in the social sciences that would tell us whether fertility in low fertility countries is likely to recover in the future or will continue to fall. The question is key to the discussion whether or not governments should take action aimed at influencing the fertility rate. To enhance the scholarly discussion in this field, the paper introduces a clearly-defined hypothesis which describes plausible self-reinforcing mechanisms that would result, if unchecked, in a continued decrease of the number of births in Europe. This hypothesis has three components: a demographic one based on the negative population growth momentum, i.e., the fact that fewer potential mothers in the future will result in fewer births, a sociological one based on the assumption that ideal family size for the younger cohorts is declining as a consequence of the lower actual fertility they see in the previous cohorts, and an economic one based on the first part of the Easterlin (1980) relative income hypothesis, namely, that fertility results from the combination of aspirations and expected income, and assumes that aspirations are on an increasing trajectory while expected income for the younger cohorts declines, partly as a consequence of population ageing induced by low fertility. All three factors would work towards a downward spiral in births in the future. If there is reason to assume that such mechanisms will indeed be at work, then this should strengthen the motivation of governments to take immediate action (possibly through policies addressing the tempo effect) in order to still escape from the expected trap.