The Modernity Trap: Structural Constraints on Fertility in Wealthy Democracies

Victor Slätis

No xbe6p_v1, SocArXiv from Center for Open Science

Abstract: The "Optimistic Consensus" suggested that fertility would recover at high development levels. We test this hypothesis using panel data from 161 countries (1990–2023, N=2,989) and find no evidence of J-curve recovery. Instead, wealthy democracies converge on a synchronized fertility decline toward a total fertility rate of 1.3–1.5 as of 2023—persistently below replacement. We construct a "Modernity Index" via principal components analysis of education, gross domestic product, and urbanization, and then estimate interaction models with cluster-robust standard errors. Modernity emerges as the primary predictor of fertility decline (β=-0.68, p<0.001), consistent with prohibitive opportunity costs that fiscal transfers cannot offset. Democracy shows no independent main effects but significantly moderates modernity's impact through an interaction term (β=+0.48, p=0.020): at high development, stronger democratic institutions correlate with marginally higher fertility. Robustness analysis with larger samples (N=5,589) strengthens these findings. Israel constitutes a statistically identified exception due to religio-cultural forces. We formalize these constraints as the "Liberal Trilemma": advanced societies struggle simultaneously sustain meritocratic education, demographic continuity, and economic growth. Policy implications are stark—even pro-natalist spending achieves TFRs 20–30% below replacement, confirming that transfers address direct costs but have not reversed structural decline.

Date: 2026-02-24
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:xbe6p_v1

DOI: 10.31219/osf.io/xbe6p_v1

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