A Causality and Co-integration Analysis of Some Selected Socio-Economic Determinants of Fertility: Empirics from Tunisia

Abstract

This study investigates the impact of some selected socio-economic factors on fertility rate in Tunisia over the period of 1971 to 2014. Philips Perron (PP) unit root test is used for testing the stationarity of the variables. For examining the co-integration among the variables of the model, Autoregressive Distributed Lag (ARDL) approach to co-integration is used. Causality among the variables of the model is examined with the help of Variance Decomposition and Impulse Response Function. The estimated results show that selected variables of the model has mix order of integration. Long run results of the study show that female education, urbanization have a significant negative relationship with the fertility rate in Tunisia. The results reveal that life expectancy and per capita income have positive and significant relationship with fertility in Tunisia. The value of ECT reveals that short needs more than 5 years to converge in the long run equilibrium. The results of Variance Decomposition and Impulse Response Function reveal that all independent variables have causal relationship with the dependent variable. The study suggests that socio-economic improvement is a key in reducing fertility rate in Tunisia.