The Korea Local Administration Review

This purpose of this study is to examine the impact of consumption quality on fertility determination based on population agglomeration. The theoretical model suggests that consumption quality may have a negative effect on the number of children under the assumption that the consumer’s utility depends on the consumption of goods and the number of children. This is because the higher consumption quality given exogenously, the higher the opportunity cost of raising children, so that the consumption of goods can increase with a small number of children. In addition, using panel data on 16 metropolitan governments from 2002 to 2017, this study estimates the negative relationship between consumption quality and fertility rate in the context of controlling various economic, social, and institutional factors. Here, ‘population density’ is used as a proxy variable for population agglomeration to reflect consumption quality by metropolitan government. Therefore, this study provide some implications that public policies for raising fertility rate should take into account long-run economic and social structures changes as well as the short-run support policies.