Bismarck in the bedroom? Pension reform and fertility: Evidence 1870-2010

Philipp Jäger

No 677, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Rising public pension generosity has frequently been cited as one reason for the (persistently) declining fertility rates in many advanced economies. Despite the theoretical appeal, empirical evidence on the pension-fertility nexus is limited. To fill this gap, I study country-level fertility trends before and after 23 pension reforms using a long-run panel dataset starting in 1870. In addition to the raw fertility rate (birth per women aged 15-49), I examine the residuals of a fertility regression, which capture variations in the fertility rate that cannot be explained by alternative theories of the historical fertility decline. Contrasting pre- and post-reform trends of the raw fertility rate as well as the fertility regression residual across countries, I do not find robust evidence that pension reforms, on average, affect fertility in the way most theoretical models predict. On the individual country level, however, some reforms are indeed associated with a significant structural break in fertility trends that is in line with the old-age security hypothesis. Varying social ties might provide an explanation for the different country-specific fertility reactions to pension reforms.

Keywords: Old-age security; fertility; pension reform (search for similar items in EconPapers)
JEL-codes: H55 J13 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-age and nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:677

DOI: 10.4419/86788785

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