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Does the Welfare State Destroy the Family? Evidence from OECD Member Countries

Author

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  • Halla, Martin

    (WU Vienna University of Economics and Business)

  • Lackner, Mario

    (University of Linz)

  • Scharler, Johann

    (University of Innsbruck)

Abstract

We study the effect of the size of the welfare state on family outcomes in OECD member countries. Exploiting exogenous variation in public social spending, due to varying degrees of political fractionalization (i.e. the number of relevant parties involved in the legislative process), we show that an expansion in the welfare state increases the fertility, marriage, and divorce rates with a quantitatively stronger effect on the marriage rate. We conclude that the welfare state supports family formation. Nevertheless, we also find that the welfare state decouples marriage and fertility, and therefore, alters the organization of the family.

Suggested Citation

  • Halla, Martin & Lackner, Mario & Scharler, Johann, 2013. "Does the Welfare State Destroy the Family? Evidence from OECD Member Countries," IZA Discussion Papers 7210, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp7210
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    Cited by:

    1. Eder, Christoph & Halla, Martin, 2020. "Economic origins of cultural norms: The case of animal husbandry and bastardy," European Economic Review, Elsevier, vol. 125(C).
    2. Verónica Escudero, 2018. "Are active labour market policies effective in activating and integrating low-skilled individuals? An international comparison," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-26, December.
    3. Josefine Koebe & Jan Marcus, 2022. "The Length of Schooling and the Timing of Family Formation [Income Taxes and the Timing of Marital Decisions]," CESifo Economic Studies, CESifo Group, vol. 68(1), pages 1-45.
    4. Josefine Koebe & Jan Marcus, 2020. "The Impact of the Length of Schooling on the Timing of Family Formation," Discussion Papers of DIW Berlin 1896, DIW Berlin, German Institute for Economic Research.
    5. Padilla-Romo, María & Peluffo, Cecilia & Viollaz, Mariana, 2022. "Parents' Effective Time Endowment and Divorce: Evidence from Extended School Days," IZA Discussion Papers 15304, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    welfare state; fertility; divorce; marriage; risk sharing;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • D1 - Microeconomics - - Household Behavior
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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