Journal on Policy and Complex Systems
1 . Introduction
The paper explores both the micro and macro levels , as well as the linkage
between the two , to answer the question of how political , economic , and demographic factors impact each other in a country ’ s development process . Scholars in international political economy have done considerable research on two scenarios of development : one is a poverty trap with persistent economic stagnation and the other is industrialization and rising incomes . It is argued that political development , measured as political stability and political capacity , is sometimes identified as a cause of economic growth and fertility decision , but sometimes it is an effect of it ( Chen & Feng , 1996 ; Feng , Kugler , & Zak , 2000 ). At the same time , economic development is sometimes modeled to have an impact on human capital and political development , but sometimes because of fertility decision and political institution ( Chen & Feng , 1996 , 2000 ; Feng et al ., 2000 ; Feng , Kugler , Swaminathan , & Zak , 2008 ).
The development literature primarily uses country-year as the unit of analysis , using society-level variables , like GDP , GDP growth , fertility rate , and literacy rate among others . Each one of these indicators is the sum of millions of human choices , sampled at arbitrary annual frequencies from an imperfect data and population distribution . However , research in the micro level is sparse , and until now the linkage between macro constraints and microlevel choices has not been established for Politics of Fertility and Economic Development ( POFED ). As a result , this paper studies income level , fertility decision , and education at the micro level of human agency , to better understand how individuals behave under different environments . Additionally , we investigate individual ’ s behavior feedback mechanism on macro-societal trends and conditions , and provide policy implications for societies to achieve development .
2 . POFED Background
For many decades , a great number of scholars have been systematically exploring the relationship between demographic change , economic growth , and political institutions . There have been contradictory findings in studies of the political economy of growth , exploring the factors that lead to either steady growth or a poverty trap . These include political , demographic , social , and economic factors . Scholars argue that demographic change has a significant impact on economic growth , with fertility rate and human capital as the two most important attributes ( Feng et al ., 2000 , 2008 ). For example , Barro ( 1991 ), Chen and Feng ( 2000 ), and Feng et al . ( 2008 ) found that the growth rate of real per capita GDP is positively related to initial human capital and low fertility rate . In the first POFED model , fertility is stated to connect politics to long-run economic performance ,
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