Demographic transition theory states that fertility declines in response to development, thus wealth and fertility are negatively correlated. Evolutionary theory, however, suggests a positive relationship between wealth and fertility. Fertility transition as a result of industrialization and economic development started in the late 19th and early 20th centuries in Western Europe; and it extended to some of the Asian and Latin American countries later on. However, economic crises since the 1980s have been co-incident with fertility decline in sub-Sahara Africa and other developing countries like Thailand, Nepal and Bangladesh in the last decade of the 20th century. A very low level of fertility is observed in Addis Ababa (TFR=1·9) where contraceptive prevalence rate is modest and recurrent famine as well as drought have been major causes of economic crisis in the country for more than three consecutive decades, which is surprising given the high rural fertility. Detailed socioeconomic and demographic characteristics of 2976 women of reproductive age (i.e. 15–49 years) residing in Addis Ababa were collected during the first quarter of 2003 using an event history calendar and individual women questionnaire. Controlling for the confounding effects of maternal birth cohort, education, marital status and accessible income level, the poor (those who have access to less than a dollar per day or 250 birr a month) were observed to elongate the timing of having first and second births, while relatively better-off women were found to have shorter birth intervals. Results were also the same among the ever-married women only model. More than 50% of women currently in their 20s are also predicted to fail to reproduce as most of the unmarried men and women are ‘retreating from marriage’ due to economic stress. Qualitative information collected through focus group discussions and in-depth interviews also supports the statistical findings that poverty is at the root of this collapse in fertility. Whilst across countries wealth and fertility have been negatively correlated, this study shows that within one uniform population the relationship is clearly positive.