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Does the Welfare State Destroy the Family? Evidence from OECD Member Countries

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  • Martin Halla
  • Mario Lackner
  • Johann Scharler

Abstract

We study the effect of the size of the welfare state on family outcomes in OECD member countries. Exploiting exogenous variation in public social spending, due to varying degrees of political fractionalization (i.e. the number of relevant parties involved in the legislative process), we show that an expansion in the welfare state increases the fertility, marriage, and divorce rates with a quantitatively stronger effect on the marriage rate. We conclude that the welfare state supports family formation. Nevertheless, we also find that the welfare state decouples marriage and fertility, and therefore, alters the organization of the family.

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Bibliographic Info

Paper provided by Department of Economics, Johannes Kepler University Linz, Austria in its series Economics working papers with number 2013-04.

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Length: 35 pages
Date of creation: Feb 2013
Date of revision:
Handle: RePEc:jku:econwp:2013_04

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Keywords: Marriage; divorce; fertility; welfare state; risk sharing;

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