THE EASTERLIN EFFECT

The Easterlin effect posits cyclical changes in demographic and social behavior as the result of fluctuations in birth rates and cohort size during the post-World War II period. Large cohort size reduces the ec onomic opportunities of its members and reduces income relative to sma ller parental generations. Low relative economic status in turn leads to lower fertility, higher rates of female labor force participation, later marriage, higher divorce and illegitimacy, and increasing homici de, suicide, and alienation. Cycles in birth rates and cohort size sug gest that the small baby bust cohorts entering adulthood in the 1990s will enjoy higher relative income, more traditional family structures, and lower levels of social disorganization. Of interest to economists and sociologists, the Easterlin effect has generated a large literatu re in the several decades since it was first proposed. Our review of t he empirical studies notes the diversity of support across behaviors, time periods, and nations. Up to 1980, changes in wages, fertility, an d social disorganization closely matched cohort size, but individual-l evel studies found little influence of relative income within cohorts. Further, the correspondence of the trends ends in the 1980s and appea rs in few countries other than the United States. Our review emphasize s both the contingent nature of the Easterlin effect and the way in wh ich conditions have changed in recent decades to reduce the salience o f cohort size for social and demographic behavior.