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Pensions and fertility: back to the roots

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  • Robert Fenge

    () (University of Rostock
    CESifo)

  • Beatrice Scheubel

    () (European Central Bank
    CESifo)

Abstract

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 provides detailed evidence on the mechanism by which a public pension system depresses fertility, based on historical data. Our theoretical framework highlights that the effect of a public pension system on fertility is ex ante ambiguous while its size is determined by the internal rate of return of the pension system. We identify an overall negative effect of the introduction of pension insurance on fertility using regional variation across 23 provinces of Imperial Germany in key variables of Bismarck’s pension system, which was introduced in Imperial Germany in 1891. The negative effect on fertility is robust to controlling for the traditional determinants of the first demographic transition as well as to other policy changes.

Suggested Citation

  • Robert Fenge & Beatrice Scheubel, 2017. "Pensions and fertility: back to the roots," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(1), pages 93-139, January.
  • Handle: RePEc:spr:jopoec:v:30:y:2017:i:1:d:10.1007_s00148-016-0608-x
    DOI: 10.1007/s00148-016-0608-x
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    Cited by:

    1. Alessandro Cigno & Mizuki Komura & Annalisa Luporini, 2017. "Self-enforcing family rules, marriage and the (non)neutrality of public intervention," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(3), pages 805-834, July.
    2. repec:spr:jopoec:v:31:y:2018:i:3:d:10.1007_s00148-017-0681-9 is not listed on IDEAS
    3. 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.
    4. Jäger, Philipp, 2017. "Bismarck in the bedroom? Pension reform and fertility: Evidence 1870-2010," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168078, Verein für Socialpolitik / German Economic Association.

    More about this item

    Keywords

    Public pension; Fertility; Transition theory; Historical data; Social security hypothesis; European fertility decline; PAYG pension scheme;

    JEL classification:

    • 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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