# 1 Introduction

“Through marriage or, more accurately, through fathering children whom he supports, a man thus gains access to a new set of rights [to land].”(Hoben, 1973: p. 152) After decades of research, no clear consensus has emerged on whether the nature of the relationship between population growth and economic welfare is positive, negative or neutral (Birdsall et al., 2003). However, with respect to human reproduction, as the main driver of population growth, it can be stated with somewhat more certainty that fertility is too high to be socially optimal if the social cost of children exceeds their private cost. These externalities may arise in several situations. The following examples have been widely quoted in the literature: First, the interrelation between population growth, poverty, and the degradation of the local natural resource base, which is commonly associated with village economies in developing countries, may lead to a situation referred to in the literature as reproductive externalities (Dasgupta, 1993, 1995, 2000). Second, the so called congestion problem can occur if the present value of the costs of public services, such as education, health, and infrastructure, exceed the present value of a newborn child’s expected lifetime tax contribution. This creates a condition in which each additional child dilutes the public services available to the other children (World Bank, 1984; Schultz, 1985). Third, since child and adult labor are substitutes, high fertility may lead to a low level wage equilibrium where children work and the wages of adults are depressed (Basu and Van, 1998). While such externalities are hard to observe, the case for policy makers seems to be clear. For instance, in 2013, 37 per cent of the countries in the world pursued policies to lower the rate of population growth, the majority of which can be found at the lower tail of the world income distribution (UN DESA, 2013).

However, the question whether fertility rates can actually be reduced is still open. In the long-run, the answer seems to be yes. Historically, fertility rates were observed to drop as countries began to prosper, urbanize, and structurally change during industrialization. Apparently, this observation is consistent with the fact that high fertility rates are now mainly concentrating in sub-Saharan Africa and South Asia (Maddison, 2006). In the short- and medium-term, public polices such as family planning information and services, entitlements, taxes, disincentives, and quota are being employed (Birdsall, 1988).<sup>1</sup> In this paper, we draw attention to another domain of public policy, the arrangement and rearrangement of property rights, in influencing fertility rates. We do this in Ethiopia, a country which has some of the highest fertility rates in the world.

We draw on a natural experiment to evaluate the impact on fertility outcomes of the abolishment of pronatal property rights. Historically, rules governing access to land in the Amhara region of Ethiopia were pronatal. In the traditional system of communal land governance, men could claim land on be-

> 1 These programs have, however, mixed effects in lowering fertility rates. See McQueston et al. (2012) for a systematic review of the impact of interventions targeting fertility outcomes.

1