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Pensions and Fertility: Back to the Roots - The Introduction of Bismarck's Pension Scheme and the European Fertility Decline

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  • Robert Fenge
  • Beatrice Scheubel

Abstract

Fertility has long been declining in industrialised countries and the existence of public pension systems is considered as one of the causes. This paper is the first to provide detailed evidence based on historical data on the mechanism by which a public pension system depresses fertility. Our theoretical framework highlights that the effect of a public pension system on fertility works via the impact of contributions in such a system on disposable income as well as via the impact on future disposable income that is related to the internal rate of return of the pension system. Drawing on a unique historical data set which allows us to measure these variables a jurisdictional level for a time when comprehensive social security was introduced, we estimate the effects predicted by the model. We find that beyond a general depressing effect of social security on birth, a lower internal rate of return of the pension system is associated with a higher birth rate and a higher contribution rate is associated with a lower birth rate.

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  • Robert Fenge & Beatrice Scheubel, 2013. "Pensions and Fertility: Back to the Roots - The Introduction of Bismarck's Pension Scheme and the European Fertility Decline," CESifo Working Paper Series 4383, CESifo.
    • Handle: RePEc:ces:ceswps:_4383
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    2. Jäger, Philipp, 2017. "Bismarck in the bedroom? Pension reform and fertility: Evidence 1870-2010," Ruhr Economic Papers 677, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    3. Jäger, Philipp, 2017. "Bismarck in the bedroom? Pension reform and fertility: Evidence 1870-2010," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168078, Verein für Socialpolitik / German Economic Association.
    4. Tomáš Evan & Pavla Vozárová, 2018. "Influence of women’s workforce participation and pensions on total fertility rate: a theoretical and econometric study," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 8(1), pages 51-72, April.
    5. Banyár, József, 2021. "Az emberi gesztáció finanszírozása vagy emberitőke-alapú nyugdíjrendszer? Augusztinovics Mária nyugdíjrendszer-elképzelései újra megfontolva [Financing human gestation or a human capital-based pens," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 987-1011.

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    More about this item

    Keywords

    public pension; fertility; transition theory; historical data; social security hypothesis;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • 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
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913

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