Fertility and Financial Development: Evidence from U.S. Counties in the 19th Century

34 Pages Posted: 15 Sep 2014 Last revised: 22 Sep 2014

See all articles by Alberto Basso

Alberto Basso

University of Plymouth - Plymouth Business School

Howard Bodenhorn

National Bureau of Economic Research (NBER); Clemson University - College of Business and Behavioral Science

David Cuberes

University of Sheffield

Date Written: September 2014

Abstract

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.

Suggested Citation

Basso, Alberto and Bodenhorn, Howard and Cuberes, David, Fertility and Financial Development: Evidence from U.S. Counties in the 19th Century (September 2014). NBER Working Paper No. w20491. Available at SSRN: https://ssrn.com/abstract=2496247

Alberto Basso (Contact Author)

University of Plymouth - Plymouth Business School ( email )

Mast House
Plymouth, Devon PL4 8AA
United Kingdom

Howard Bodenhorn

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Clemson University - College of Business and Behavioral Science ( email )

Clemson, SC 29631
United States

David Cuberes

University of Sheffield ( email )

9 Mappin Street
Sheffield, S1 4DT
UNITED KINGDOM

HOME PAGE: http://merlin.fae.ua.es/cuberes/

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