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Pensions and Fertility: Back to the Roots

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  • Fenge, Robert
  • Scheubel, Beatrice
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

  • Fenge, Robert & Scheubel, Beatrice, 2016. "Pensions and Fertility: Back to the Roots," VfS Annual Conference 2016 (Augsburg): Demographic Change 145689, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc16:145689
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    7. Guinnane, Timothy & Streb, Jochen, 2019. "Bismarck to no Effect: Fertility Decline and the Introduction of Social Insurance in Prussia," Working Papers 13, German Research Foundation's Priority Programme 1859 "Experience and Expectation. Historical Foundations of Economic Behaviour", Humboldt University Berlin.
    8. Jäger, Philipp, 2017. "Bismarck in the bedroom? Pension reform and fertility: Evidence 1870-2010," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168078, Verein für Socialpolitik / German Economic Association.
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    More about this item

    JEL classification:

    • 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
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913

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