The Impact of Demographic Shifts in Fertility and Age of Birth on Income Inequality and Poverty: A Cross-National Study of 20 Western Countries

In the course of this Master thesis, I aim to assess whether structural changes in fertility rates and the mean age of mothers at first childbirth since the early 1970s have influenced the income distribution and the risk of being poor in 20 Western countries. Various theoretical studies predict that both the fall in fertility rates and the contemporaneous rise in the average age of first-time mothers have an equalizing and poverty-reducing effect. Conversely, the underlying trend is giving rise to imbalances in the population pyramid, which may contribute to a more inegalitarian society with higher poverty rates. To date, the body of literature is mainly focusing on developing countries, and when cross-national studies were conducted, demographic variables were primarily treated as control variables. By using standardized panel data techniques, including two-way random effects and fixed effects estimation, and by bringing demographic variables back to the center of the analysis of country-specific poverty and inequality trends, this thesis aims to overcome some of the shortcomings found in the literature. Yet, since empirical results provide mixed evidence for both relationships, further research is urgently needed.