Fertility and Financial Development: Evidence from U.S. Counties in the 19th Century
Howard Bodenhorn () and
David Cuberes ()
No 20491, NBER Working Papers from National Bureau of Economic Research, Inc
The old-age security hypothesis establishes that one important reason why parents have a large offspring is to ensure that they will receive financial support from them in old age. In this paper we use data on fertility and financial development in 19th century U.S. to indirectly test this theory. In particular, we explore whether more developed local financial markets reduce the incentives for families to have a large offspring. After controlling for several factors likely to create cross-county variation in fertility levels and for potential spatial correlation, we find that the presence of a bank and the degree of financial development in a given county are strongly associated with lower children-to-women ratios. We find compelling evidence for the old-age security hypothesis.
JEL-codes: N21 N31 N91 R2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-gro and nep-his
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Working Paper: Fertility and Financial Development: Evidence from U.S. Counties in the 19th Century (2013)
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