Pensions and Fertility: Back to the Roots - The Introduction of Bismarck's Pension Scheme and the European Fertility Decline

42 Pages Posted: 10 Sep 2013

See all articles by Robert Fenge

Robert Fenge

University of Rostock - Department of Economics

Beatrice Scheubel

European Central Bank (ECB); Ludwig Maximilian University of Munich (LMU) - Center for Economic Studies (CES)

Multiple version iconThere are 2 versions of this paper

Date Written: September 10, 2013

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 is the first to provide detailed evidence based on historical data on the mechanism by which a public pension system depresses fertility. Our theoretical framework highlights that the effect of a public pension system on fertility works via the impact of contributions in such a system on disposable income as well as via the impact on future disposable income that is related to the internal rate of return of the pension system. Drawing on a unique historical data set which allows us to measure these variables a jurisdictional level for a time when comprehensive social security was introduced, we estimate the effects predicted by the model. We find that beyond a general depressing effect of social security on birth, a lower internal rate of return of the pension system is associated with a higher birth rate and a higher contribution rate is associated with a lower birth rate.

Keywords: public pension, fertility, transition theory, historical data, social security hypothesis

JEL Classification: C210, H310, H530, H550, J130, J180, J260, N330

Suggested Citation

Fenge, Robert and Scheubel, Beatrice, Pensions and Fertility: Back to the Roots - The Introduction of Bismarck's Pension Scheme and the European Fertility Decline (September 10, 2013). CESifo Working Paper Series No. 4383, Available at SSRN: https://ssrn.com/abstract=2323271

Robert Fenge

University of Rostock - Department of Economics ( email )

Ulmenstr. 69
Rostock, 18057
Germany

Beatrice Scheubel (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Ludwig Maximilian University of Munich (LMU) - Center for Economic Studies (CES)

Schackstr. 4
Munich, 80539
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
89
Abstract Views
1,214
rank
253,393
PlumX Metrics