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The introduction of Bismarck's social security system and its effects on marriage and fertility in Prussia

Author

Listed:
  • Guinnane, Timothy
  • Streb, Jochen
Abstract
Economists have long argued that introducing social insurance will reduce fertility. The hypothesis relies on standard models: if children are desirable in part because they provide security in case of disability or old age, then State programs that provide insurance against these events should induce couples to substitute away from children in the allocation of wealth. We test this claim using the introduction of social insurance in Germany in the period 1881-1910. Bismarck's social-insurance scheme had three pillars: health insurance, workplace accident insurance, and an old age pension. Earlier studies typically focus on the pension alone; we consider all three pillars. We find that Bismarck's social insurance system affected fertility overall only via its effects on the incentive to marry. The old age insurance by itself tended to reduce marriages, but the health and accident-insurance components had the opposite effect. For people exposed to all three pillars of social insurance, the two effects cancelled each other and the aggregate effect on fertility was muted.

Suggested Citation

  • Guinnane, Timothy & Streb, Jochen, 2021. "The introduction of Bismarck's social security system and its effects on marriage and fertility in Prussia," Ruhr Economic Papers 901, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:901
    DOI: 10.4419/96973042
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    as
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    Cited by:

    1. Lehmann-Hasemeyer, Sibylle H. & Neumayer, Andreas & Streb, Jochen, 2022. "Heterogeneous savers and their inflation expectation during German industrialization: Social class, wealth, and gender," Working Papers 33, German Research Foundation's Priority Programme 1859 "Experience and Expectation. Historical Foundations of Economic Behaviour", Humboldt University Berlin.
    2. Lehmann-Hasemeyer, Sibylle & Neumayer, Andreas & Streb, Jochen, 2023. "Heterogeneous inflation and deflation experiences and savings decisions during German industrialization," Journal of Banking & Finance, Elsevier, vol. 154(C).
    3. Timothy W. Guinnane & Tobias A. Jopp & Jochen Streb, 2021. "Bismarcks Sozialversicherung und ihr Einfluss auf Deutschlands demografischen Wandel," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 101(4), pages 262-265, April.

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    More about this item

    Keywords

    Social insurance; pensions; fertility transition; marriage; Bismarck; Prussia;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913

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