Preferences for a family size

During the Soviet era, a typical Armenian family had two-three children. One-child families were rare. The current fertility rates (the average number of children born to a woman over her lifetime) are down to 1.3 in 2005 (down from 2.8 in late 1980s). What are the reasons for such abruptly declining fertility rates?

Changes in preferences for a family size might have been motivated by several reasons. First of all, the socio-economic conditions in the country induced families to cut back on the size. Second, the Armenian women, especially in urban areas, became more independent and career-oriented, thus private incentives have undergone major changes. Third, the government does not exhibit pro-natalist sentiments. The child allowance program in Armenia is minuscule: only 0.35 percent of the state budget was spent on child allowance program in 2005. The program itself envisions a lump-sum allowance of 35,000 AMD at childbirth (raised from 5,900 AMD in 2003) and a monthly allowance of 3,000 AMD for children of age two and younger (if the mother is employed, the family gets only 50% of the monthly allowance).

From the 2003 Household Survey, one can identify 86 households (out of 1396 surveyed households having a female married member between ages 18 and 35) who welcomed a newborn to their household in 2003. Unfortunately, none of the households reported to receive a lump-sum child allowance. Could it be that the survey questions were poorly designed and didn’t make it clear that child allowance is one of the income categories the household receives? Or in fact the households didn’t claim their right to receive the allowance in time, therefore losing the privilege? One way or another, after examining total household income per month it becomes clear that the child allowance of even as little as 35,000 AMD could have made a big difference in the lives of many households. The household income varies from 5,000 AMD to 965,000 AMD per month with a mean of 90,315 AMD and a standard deviation of 124,541 AMD. As seen from the graph below, the distribution of household income per month is highly right-skewed (the histogram excludes two outliers with 591,000 and 965,000 AMD monthly income, respectively).

One thing I wish for is better designed surveys that will make it easy to evaluate the link between the social policies and fertility rates in the country.