Does Government Crowd Out the Family?

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