Spatial Dimensions of the Easterlin Hypothesis: Fertility Variations in Italy

The paper re–evaluates the Easterlin hypothesis in a multiregional context by conceptually and methodologically accounting for two processes of spatial interdependence in an open subnational demo–economic system: diffusion of fertility norms and values across space, and movements between labor markets. The empirical analysis estimates pooled cross–sectional, time–series models using data for 18 Italian regions from 1952 to 1995. The results suggest that accounting for spatial interdependencies is necessary to avoid model misspecifications. Moreover, the models lead to space–time landscapes of fertility elasticities that suggest, for the majority of space–time units, an inverse Easterlin effect for the diffusion component but support of the Easterlin hypothesis due to labor movements across space.