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

  • Halla, Martin


    (University of Innsbruck)

  • Lackner, Mario


    (University of Linz)

  • Scharler, Johann


    (University of Innsbruck)

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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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7210.

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Length: 36 pages
Date of creation: Feb 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7210
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