One of the biggest demographic issues that many advanced industrialized countries face is the persistence of low fertility rates. Declining fertility rates pose potential obstacles to economic growth. Government budgets have to accommodate more pension and health services as the number of adults of working age who contribute to older generations’ pensions diminishes. In this paper, I examine the determinants of fertility rates at the national level of 17 Organization for Economic Co-operation and Development (OECD) countries. Specifically, I perform a pooled time-series analysis covering the time period 1990—9. The analysis yields evidence that the types of state policies — active labor market programs, family-friendly policies and employment protection laws — play a significant role in either helping or hindering fertility levels. I find that active labor market policies and generous work and family policies encourage higher fertility rates, while the presence of employment protection legislation — rules concerning hiring and firing — hinders the growth of fertility rates.
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