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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.

Suggested Citation

  • Martin Halla & Mario Lackner & Johann Scharler, 2013. "Does the Welfare State Destroy the Family? Evidence from OECD Member Countries," NRN working papers 2013-03, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  • Handle: RePEc:jku:nrnwps:2013_03
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    2. Josefine Koebe & Jan Marcus, 2020. "The Impact of the Length of Schooling on the Timing of Family Formation," Discussion Papers of DIW Berlin 1896, DIW Berlin, German Institute for Economic Research.
    3. Eder, Christoph & Halla, Martin, 2020. "Economic origins of cultural norms: The case of animal husbandry and bastardy," European Economic Review, Elsevier, vol. 125(C).

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    More about this item

    Keywords

    Marriage; divorce; fertility; welfare state; risk sharing;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • D1 - Microeconomics - - Household Behavior
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • 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

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