The long-term determinants of marital fertility in the developed world (19th and 20th centuries): The role of welfare policies

Background: Demographic transition theory was shattered dramatically as a result of the research carried out in the course of the Princeton European Fertility Project. There is still no consensus among demographers as to the causes underlying the fertility transition. Objective: We set out to test the explanatory capacity of certain variables which have traditionally been used to interpret the historical decline in fertility (mortality, level of education, economic development, urbanization) as well as the role played by the rise of the welfare state. Methods: We collected information on different kinds of socioeconomic variables in 25 developed countries over a very long period of time. We carried out panel cointegrating regressions and country panel fixed and time effects generalized least squares. Results: We show that the decline in mortality, the increase in educational level, and economic factors all played a leading role in the historical decline in fertility. We found that the present welfare system places a remarkable burden on those who decide to have a family. Conclusions: A new kind of public social transfer model needs to be designed which will minimize the damaging consequences that our current welfare states have had with regard to fertility. Contribution: 1) The emphasis on the causal impact of the emergence and maturation of the social welfare system using Lindert’s data on social transfers since the late 19th century to 1990. 2) The enormous amount of historical data compiled, as documented in the Appendix. 3) The modern panel cointegration techniques used to analyze the long- and short-term impacts of the different determinants of fertility.