Differences in fertility behavior and uncertainty: An economic theory of the minority status hypothesis

We revisit the question of why fertility behaviors and educational decisions appear to vary systematically across ethnic groups. We assess the possibility that differences in fertility across groups remain even though their socio-economic characteristics are similar. More specifically, we consider that parents’ fertility decisions are affected by the uncertainty concerning the future economic status of their offspring. We assume that this uncertainty varies across groups and is linked to the size of the group one belongs to. We find theoretical support for the minority status hypothesis according to which members of large minorities usually have a higher fertility than those in the majority facing low potential for social mobility while small minorities have lower fertility.