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

Robert Fenge2, Beatrice Scheubel 1
1Center for Economic Studies, University of Munich, Germany, 2University of Rostock, Germany, 3CESifo, Germany

Fertility has long been declining in industrialised countries and the existence of a public pension system is considered as one of the causes. We use the first comprehensive introduction of a public pension scheme in the world as a natural experiment setting to estimate the direct behavioural effect on fertility. We thus provide information on the importance of the investment motive for childbearing. Our results indicate an almost immediate reduction after the introduction, which accumulates to a reduction of 2-4 births per 1000 persons after a lag of 10 years, i. e. an average decrease of 5-10%.

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