INVERTED EASTERLIN FERTILITY CYCLES AND KORNAI SOFT BUDGET CONSTRAINT

Richard Easterlin's baseline model of self-reinforcing fertility cycles applies to systems with open, competitive labor markets and an insignificant volume of international migration. This analysis examines what happens in circumstances where such a labor market is replaced by a central planned economy and state guarantees of full employment. The conclusion, foreshadowed by the theoretical writings of Janos Kornai, appears to be that fertility varies directly with parents' cohort size, a relationship just the inverse of the more familiar pattern observed in some Western societies. -Author