Falling Fertility Rates: New Challenges to the Welfare State

Vos, Allison E. (2009) Falling Fertility Rates: New Challenges to the Welfare State. In: UNSPECIFIED. (Unpublished)

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Abstract

One of the biggest issues currently plaguing many advanced industrialized countries is the persistence of low fertility rates. Decreasing fertility rates threaten economic growth, while government budgets have to accommodate more pension and health services as the number of adults of working age who contribute to older generations’ pensions diminishes. I examine the determinants of fertility levels at the national level of seventeen OECD countries. Specifically, I perform a pooled time series analysis covering the time period 1990-1999. The analysis yields evidence that the types of state policies—active labor market programs, family-friendly policies, and employment protection laws—play a significant role in either helping or hindering fertility levels. I find that Active Labor Market Policies and generous work and family policies encourage higher fertility rates, while the presence of Employment Protection Legislation—rules concerning hiring and firing—hinders the growth of fertility rates.

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