Sweden: The Relationship Between Income & Birth Rates of People Born 1940–70
A 2021 study (The relationship between life-course accumulated income and childbearing of Swedish men and women born 1940–70 by Martin Kolk) examines the association between life-course accumulated income and fertility in Sweden. The author uses rich administrative data to investigate whether individuals with higher or lower incomes over their lifetimes have more or fewer children, and how this relationship has evolved across cohorts born between 1940 and 1970.
Background and Motivation
The income-fertility relationship is a classic topic in demography, with implications for both micro-level family dynamics and macro-level population processes. Theoretical perspectives offer competing predictions:
Classical demographic theory suggests that higher income should enable greater childbearing, as children are costly. If children are viewed as a "normal good," fertility should increase with income.
Economic theories argue that higher income raises the opportunity cost of childbearing, particularly regarding parental time. This could lead to a negative income-fertility association.
Reverse causality is also possible, with parenthood affecting income trajectories through career interruptions or employer discrimination.
However, most prior empirical research has relied on cross-sectional income measures or short-term changes in income relative to childbearing. Few studies have directly examined how life-course income correlates with completed fertility, which is crucial for understanding the stratification of reproduction.
Data and Methods
The study leverages Swedish administrative registers containing over 44 years of annual income data for cohorts born 1940-1970, linked to complete fertility histories. Two income measures are used:
Disposable income (after taxes and transfers, including parental leave and child allowances)
Earnings (before taxes and transfers, excluding parental leave)
These capture different aspects of parents' economic resources. The author examines how accumulated income up to various ages relates to fertility at those ages, by sex and cohort. Key advantages of this approach include:
Assessing actual realized income rather than projections
Measuring income in the decades when childrearing costs are incurred
Accounting for income trajectories before and after childbearing
Key Findings
The analysis reveals an increasingly positive relationship between life-course income and fertility across cohorts, particularly for men but also emerging for women in later cohorts.
For men, fertility increases monotonically with accumulated income. The gradient is substantial, with childless men having much lower income than fathers at all parities. This pattern is consistent for both disposable income and earnings.
For women, the association shifts from slightly negative to positive over time. In recent cohorts, accumulated disposable income is strongly positively associated with fertility. For earnings, high-parity women still have relatively low incomes, but the earnings of mothers with 1-3 children exceed those of childless women.
Examining mean fertility across the income distribution further illustrates the positive gradient. For men, fertility rises steadily with income in all cohorts. A clear reversal from a negative to a positive gradient occurs between the 1940 and 1960 cohorts for women.
Contributions and Implications
This study breaks new ground by directly measuring the relationship between life-course income and completed fertility. The findings challenge the 20th-century paradigm of a negative income-fertility association and document the emergence of a positive gradient in contemporary Sweden.
This positive association has important implications for inequality, as it suggests that higher-income individuals increasingly have more children, enabling greater investments per child and potentially accelerating the reproduction of advantage across generations.
The findings also speak to the role of the welfare state in shaping the income-fertility link. Generous transfers and family policies in Sweden may help to remove financial barriers to childbearing and reduce the earnings penalty of parenthood for women. Cross-national comparative research is needed to assess whether the positive income-fertility gradient is unique to the Nordic context.
Methodologically, the study demonstrates the value of a life-course perspective for illuminating the social stratification of fertility. Static measures of income at particular ages may miss important dynamics, especially for women. Studying cohort change with long-run income trajectories is essential.
While unable to definitively adjudicate between the causal effects of income on fertility vs. selection processes, this research provides the clearest evidence to date on the strong positive correlation between lifetime income and childbearing in Sweden. Investigating this striking pattern's mechanisms is an important challenge for future work.