I’ve been claiming for a while now that families that can afford to do so should educate their own darn children, in part because children (and for that matter, education) are not public goods.
Today, I wandered across a study that bent my brain in that lovely way arguments do that make glaringly obvious things one hasn’t considered. Michele Boldrin and colleagues have apparently linked the existence of government pension programs such as Social Security to falling fertility rates.
If a causal relationship does exist, then it would appear that we have transformed children into a public good. Traditionally, older people would expect to be cared for by their children, so it was important to have some of your own. Social Security and Medicare make it possible to be cared for by other people’s children. These programs reduced the expected value of having children at the same that childrearing costs were going up rapidly due to educational expenses.
Of course, most people have families for reasons unrelated to their finances. But at the margin, increased costs and reduced benefits should both affect fertility. People who skip childrearing entirely and then collect Social Security are free riders.
Posted by Marie Gryphon on May 19, 2005One incredibly simple explanation is that the "increases in old age pensions" is merely a surrogate for chronology--old age pensions have generally been increasing since the 1930s. Also over that time, birth control has been increasing. Also over the latter portion of that time, legal abortions became available.
Posted by: LR on May 24, 2005 5:15 PM