The present article presents empirical evidence that the size of public pensions is insignificant for differences in birth rates between Western European countries. This implies that false incentives provided by pension entitlements independent of the number of children do not lead to any significant distortions of the fertility decision. In addition, it is shown empirically that the cross-country differences in birth rates are caused, in particular, by differences in the availability and acceptance of day-care facilities for children. Therefore, rather than spending public money to provide pension entitlements dependent on the number of children, it would be better to subsidize or expand day-care facilities for children.
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Article provided by Duncker & Humblot, Berlin in its journal Schmollers Jahrbuch.
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Find related papers by JEL classification: H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
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