The Relationship Between Economic Growth, External Financing, and Total Fertility Rate in Nepal

Fertility decline is one of the leading causes of demographic transition. Purpose: This study focuses on how socio-economic factors such as per capita income (Economic growth), Female education, ODA, REMIT, and FDI affect Nepal's total fertility rate. Methods: The Autoregressive Distributed Lag (ARDL) approach is used to analyze the impacts of the socio-economic factors on fertility. This research used Yearly time series data spanning 1985 to 2022. Result: ARDL bound test suggests a long-term cointegrating relationship between socio-economic factors and fertility rate at a 1 % significance level. The ARDL long-run result reveals that external financial inflow (ODA, REMITTANCE, FDI) and PGDP are positively associated with Nepal's fertility rate, supporting the income effect hypothesis. Female secondary education inversely affects fertility at a 10% significance level. The economic impact of remittance on Nepal's fertility is statistically insignificant, but it may impact fertility through socio-cultural channels. Conclusion: A Positive relationship between External financing and fertility suggests that External financing seems to be utilized to fulfill the consumption needs of Nepali households. Policy is required to encourage household investing in external financing in productive sectors like education, health, and infrastructure for sustainable economic growth and a stable population size in Nepal.