Pensions and Fertility: Back to the Roots

Robert Fenge and Beatrice Scheubel

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

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.

JEL-codes: H55 J13 N33 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-age and nep-his
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Journal Article: Pensions and fertility: back to the roots (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc16:145689

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