Does Government Crowds Out the Family?

66 Pages Posted: 27 Jul 2017 Last revised: 28 Aug 2017

Konstantin Yanovskiy

Gaidar Institute for Economic Policy

Daniel Shestakov

National Research University Higher School of Economics

Date Written: July 20, 2017

Abstract

Government interventions into the traditional functioning of the family became an important factor in the recent family crisis in developed countries (fewer marriages, more divorces, and lower birth rate). This hypothesis has been tested statistically for the period from 1800 to 2010 with data from 17 established democracies.

We show that mandatory pension insurance might contribute to the reduction in fertility, with a lag of 40 years. Legislation encouraging a high level of female employment and mandating no-fault divorce rules is tested as an additional factor contributing to the divorce rate hike and birth rate fall. In addition, the concept of “the best interests of the child” encourages children to challenge parents' authority; the latter reduces “demand” for children (and birthrate) even further.

The reason behind this effect is the rise of the welfare state, crowding out male and parental responsibilities.

Keywords: Family Crisis, Mandatory Pension Insurance, Best Interests of the Child, Universal Suffrage, Nanny State

JEL Classification: D72, J71, K36, N40

Suggested Citation

Yanovskiy, Konstantin and Shestakov, Daniel, Does Government Crowds Out the Family? (July 20, 2017). Available at SSRN: https://ssrn.com/abstract=3006025 or http://dx.doi.org/10.2139/ssrn.3006025

Konstantin Yanovskiy (Contact Author)

Gaidar Institute for Economic Policy ( email )

Gazetny pereulok, 3-5
Moscow, 125993
Russia

Daniel Shestakov

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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