Old-age-security hypothesis
The old-age-security hypothesis is an economic hypothesis according to which parents view their children as a source of income and personal services in old age. Within the framework of this hypothesis, the demand for children is considered as the need to ensure a safe old age. As a consequence, increasing the profitability of alternative assets or introducing a universal public pension system reduces the demand for children.
Description
According to this hypothesis, the presence of a state pension system reduces the overall birth rate and hinders investment in the human capital of children, which in the long term leads to a decrease in the size of the working-age population and affects their overall income growth. On the contrary, the absence of alternative assets or state pension provision makes it necessary to have children.This hypothesis is based on two basic assumptions: people control the number of children born and people in their actions are guided by selfish motives. According to this hypothesis, payments from children to support their elderly parents are seen as a return on loans that parents spent to provide for their children in childhood.
Alternative hypotheses explaining the birth rate are intergenerational altruism and various hypotheses related to the labor market.
The earliest mention of the inverse relationship between the birth rate and the level of the population's pension is found in Leibenstein in 1957. Van Groezen, Leers and Meijdam in 2003, Sinn in 2007, Cigno and Werding in 2007, Ehrlich and Kim in 2007, Van Groezen and Meijdam in 2008, Gahvari in 2009, Cigno in 2010, expressed the opinion about the decline in the birth rate as a consequence of the introduction of the pension system. Fenge and von Weizsäcker in 2010, Regös in 2014, Boldrin, De Nardi and Jones in 2015. Guinnane in 2011, based on empirical evidence of declining fertility in historical time, considered the introduction of social protection as one of the reasons for the first demographic transition. Cigno and Rosati in 1992, Cigno in 2003, Billari and Galasso in 2009 examined this hypothesis at the level of specific countries and individual pension systems. Cigno and Werding in 2007 gave an overview of work on the relationship between pensions and fertility in the modern period. According to these studies, a smaller pension coverage leads to a higher birth rate.
Alessandro Cigno
According to Alessandro Cigno, ensuring old age is an incentive for raising children and a dominant factor in increasing the birth rate. Cigno also believes that it has been proven that the coverage of the population by the pension system reduces the birth rate, although it increases household savings. In his opinion, the state pension system prevents parents from investing in the human capital of their children. Considering the rapidly aging population and the imbalance between the number of recipients of pensions and those who pay pension contributions as the reason for the deficit of the pension fund and the decrease in the income of pensioners, Alessandro Cigno proposes to pay the pension to parents directly from the pension contributions of their children.Robert Fenge and Beatrice Scheubel
In 2017, Robert Fenge and Beatrice Scheubel published an article Pensions and fertility: back to the roots, where they studied the relationship between the development of the state pension system, or rather the dynamics of the share of people participating in pension insurance programs and the dynamics of fertility, using the example of the German Empire at the end of 19 and beginning 20th century. In addition to pensions, the multivariate analysis took into account those factors that scientists usually cite as the cause of the first demographic transition. Together with pensions, the impact of factors such as literacy and urbanization was analyzed. According to Robert Fenge and Beatrice Scheubel, the introduction of pensions in Germany at the turn of the 19th and 20th centuries explains up to 15% of the decline in the birth rate in 1895–1907.UN Conference on the World Population in Bucharest, 1974
A meeting dedicated to the reduction of the world population was held in Bucharest from August 19 to 30. Participants: more than 1.4 thousand delegates from 136 countries. Initiator: The USA and the UN.The plan was written in advance, it was mainly developed by the American side, initially contained quantitative target indicators for the CPR for individual countries, but as a result of the protests they had to be removed. It was the first official international document in the field of demography and fertility reduction.
The Conference is proud for the first time in history, setting the goal of "curbing population growth" for the peoples. And also worked out specific ways to achieve this Goal. Among them is the introduction of benefits and pensions.
"Recognizing the diversity of social, cultural, political and economic conditions, everyone agrees that the following development goals will lead to a moderate birth rate: reduction of infant and child mortality, full involvement of women in the development process, promotion of social justice, accessibility of education, eradication of child labor and abuse with children, the introduction of social security and old-age pensions, the establishment of a minimum age for marriage."
By this time, demographic policy and "family planning" programs had been successfully applied in Asian countries, in particular in India, Japan, Pakistan and Sri Lanka. In 1974, teaching staff worked in 39 countries, in which about 80% of the population of the "developing world" lived.
Barbara Entwistle
Here is how the author explains the purpose of his work: In 1974, a meeting took place in Bucharest, which resulted in the adoption of an Action Plan for the World Population. It is strongly recommended to introduce everywhere school education and pensions in order to benefit the population, as well as to reduce its number.Because in America it was already generally accepted that pensions and education lower fertility. And to check the correctness of this opinion, its effectiveness and applicability to different countries, as well as the predictions made earlier, Barbara just carried out this huge work.
About previous studies. On page 258, the author mentions previous studies of the dependence of fertility on pensions and education, these are: McGreevy and Birdsall, and the Triangle Research Institute, as well as Kirk, Kasarda, Adelman, Friedlander and Silver and Beaver. and others, at least 15. They showed very different results, from zero correlation to significant. Light was shed by the study of Friedlander and Silver, where they first explored the whole world, but then developed and developing countries separately, and it turned out that the negative impact of education on fertility is indeed significant in developing countries, but practically zero in developed countries.
These studies used different criteria for education, included a different number of variables, and Barbara comes to the conclusion that correlation becomes significant when the study includes 4–5 variables, in other words, when education is complemented by something else.
Beaver finds that the effect of education on fertility is more pronounced in TFR but not OCD because TFR is an age-standardized unit of measure. But the difference in results is still small. The same is indicated by the studies of Adelman and Janowitz. Another interesting finding from Beaver is that education has an effect on OCD with a lag of 12.5 years, but not 7.5 years.
Opportunities for education have skyrocketed around the world since World War II, says Barbara. Other studies of the dependence of fertility on education, using, like Beaver, data for the 1950s - early 1960s, found no relationship between them.
So the question of the dependence of fertility on education remains unclear, although it has been comprehensively and in detail discussed. On this, with education, Barbara ends and moves on to pensions.
Friedlander and Silver were the first to introduce pensions into country comparisons. They found a significant influence of this factor, both for developed and developing countries, which was not found according to earlier data from 1960.. Holm, in contrast to Friedlander and Silver, already finds a significant negative correlation between fertility and pension coverage, possibly due to the fact that more recent data from the mid-1960s are used. The size of the pension has very little effect on the birth rate..
Kelly, Cutwright, and Hittle criticized Holm for not taking into account the so-called. modernization, they argued that the drop in the birth rate does not actually correlate with pensions, but with modernization, and with the introduction of the modernization coefficient they created, the impact of pensions was already insignificant.
Holm responded with a paper, where he analyzed the correlation of fertility and another indicator, the percentage of government spending on pensions from the GDP of that state, and on a larger sample of countries. She confirmed the pension hypothesis, even with the inclusion of this modernization index. Again, Holm's work shows a stronger negative effect of pensions on fertility in developing countries, especially in the early 1960s.
Barbara mentions 4 more studies, which gave the same result as hers, but her work is more detailed, because it shows that pensions affect not only the birth rate, but also the rate at which it declines, that pensions have a delayed effect, and that this effect increased during the 1960s. Initially, the effect was more pronounced in developing countries, but the difference faded as they developed over a 10-year period.
According to Barbara, the creation of comparative analysis models across countries began, according to Barbara, in Weintraub's rather simple model of the dependence of OCD on economic development indices. Since then, the models have become more complex, including more and more variables, including education and pensions, as well as population density, urbanization index, working women, family planning programs, and others. It is curious that many studies show a positive, albeit small, impact of urbanization, like this thesis, and a clear negative impact of urbanization on fertility - Beaver. Moldin et al. showed a significant impact of family planning programs in developed countries 1965-1975, but did not take into account pensions.
A study by Moldin showed that family planning programs in developing countries have mitigated the effect of economic inequality on fertility, i.e. the poor, whose fertility is usually higher, have lowered this rate. In the 1970s, the delayed effects of family planning programs were expected to affect developed countries than developing countries, but Moldin did not find significant differences between these groups of countries in the rate of decline in fertility in the 1970s.... This may indicate that some other factor influenced. p. 268
Research became more complex, Heer, Kirk, Gregory et al., Beaver, Gregory and Campbell, examined a variety of relationships on a variety of variables. Attention is paid to threshold values, for example, Moldin estimates the threshold of female literacy from 55 to 85%, from that moment it begins to influence fertility.
The same threshold should apply to pensions, Barbara notes, but there is no research yet that defines this threshold.
Pages 271-276 are devoted to some controversial issues of methodology, for example, the author is a supporter of the so-called. homogeneity, i.e. claims that different nations under the same conditions will behave in the same way. "Heterogeneous women" let them prove it, she says. Or the question of how best to group nations for analysis? or the issue of the influence of time on the results
Barbara notes that there is interdependence, but she would view education and pensions as causes, and fertility as a consequence. In the chapter "Pension and education programs as a policy of fertility," Barbara notes that these programs are essentially equal to the political decision of the state to reduce the birth rate and curb the growth of its population, and the choice is up to the state.. Thus, Tsul and Baugh conclude that the trends of recent years are encouraging because rid the world of the darkest prospects of overpopulation, famine and world war, outlined, according to the Malthusians, by the year 2000. Has a remedy been found for overpopulation? It's premature to think so, says Barbara. In 1975, the birth rate was 4,688 births per 1,000 women in 24 Latin American countries, 6,264 in 40 African countries, 6,009 in 16 countries in the Middle East, 4,572 in 25 Asian countries - the danger has not yet passed. By 1978, the situation had not changed, and 2/3 of developing countries have this figure above 5,000, and more than half of them are more than 6,000, that is, the countries of the Third World double their numbers per generation. Tsul and Baugh are pinning their hopes on family planning programs that world leaders must implement. But these programs only reduce the number of children to what is desired, which is still quite high in developing countries, says Arnold et al., examining 4 countries.
The policy of reducing the birth rate must continue, Barbara insists.
Barbara Entwistle, in her 1981 dissertation, proposes a "child role hypothesis" based on the thesis that mass education and pension programs are linked to fertility by feedback. Barbara notes that this thesis was put forward by scientists and before her, mentions four previous studies of the relationship between pensions and fertility, two of which did not find a connection. one revealed a very weak dependence, on the verge of statistical error, and the last showed a strong dependence.
Barbara conducted a comprehensive analysis for 146 ethnic populations, of which 120 had complete data, and for 1960, 1965 and 1970. It turned out that 1970 showed a more pronounced dependence than 1965, and 1965, in turn, showed a more pronounced dependence than 1960, in other words, earlier work examined earlier data, where the dependence is small.
Barbara names two explanations for this negative dependence, accepted in American demography: economic, where children are breadwinners in old age, and pensions reduce this role, and generally accepted that pensions change the structure of the family. Both of them lead to the same result - a decrease in the birth rate, so Barbara does not distinguish between them, i.e. does not introduce indices measuring the value of children, nor the strength of bonds between children and parents. Although she herself is leaning towards the generally accepted explanation, rather than the explanation of "cost and benefit", because, in her opinion, this explains the delayed effect of pensions. Parents-to-be must learn about pensions and the opportunities they provide, and this takes some time. This generally accepted explanation is also supported by the fact that the effect of pensions increases over time, which, in her opinion, would not have been the case with the "prices and benefits" mechanism.
Pensions have been found to have a deferred effect, i.e. their action slows down.
But Barbara did not find the dependence of fertility on educational programs, or very weak, on the verge of a statistical error, which "disappointed" her, which again, in her opinion, does not confirm the hypothesis of "prices and benefits," according to which The "price" of children is greatly increased precisely from education, because parents are forced to spend many years on school bags and notebooks, instead of sending the child to work and carrying a penny into the house. Another confirmation of the hypothesis of the influence of pensions precisely through the weakening of family ties, Barbara considers the fact that pensions initially had a stronger effect on developing countries, because in developed family ties were already weakened.
Barbara notes two studies that introduced indices of family ties, and showed that fertility changes in accordance with them, as predicted. She emphasizes the importance of developing such indices, and so that they include not only the content of parents, but also cohabitation, there are no such indicators yet, and most of the countries cannot be evaluated by this indicator.
Caldwell put forward a similar hypothesis that Westernization rather than industrialization reduces fertility, based on African countries where industrialization was in its infancy, but something already influenced fertility - and this, according to the author, is Westernization. In other words, the prospect of receiving a pension in the future already influenced, and not an example of ancestors. Although such a claim needs more proof, adds Barbara.
But pensions just fit into the Hypothesis of the role of children, because liberate children from the need to feed their parents, thereby weakening family ties, reducing family and the desire to have their own children, and the fertility predictions made on this basis came true.
On pages 205, Barbara sums up that pensions are extremely promising for reducing the birth rate, and advises all Third World countries to introduce pensions for this purpose. Training programs for such a reduction are not useful, says Barbara, except in terms of spreading knowledge about contraception, activities outside the family, etc. among future parents. And even such education, firstly, will take time, and secondly, it will have little effect.
Cites article 20 of the Universal Declaration of Human Rights, which says that "everyone has the right to social security, and notes that the Plan of Action on World Population supports this thesis precisely from the goal of reducing the population, as well as ensuring human rights.
Barbara finds it useful not only to make a comparative analysis across countries, but also for individual communities that differ in terms of pension coverage and education, up to the study of individual families, the hypothesis of the role of children is very promising, because predictions come true. Conclusions: the nuclear family is weaker than the "long" family or heterogeneity. For example, in developed countries, the decline in fertility due to the introduction of pensions turned out to be less than the forecast showed. The greatest influence of pensions had on the developing countries and the countries of Latin America, and of the studied 1960, 1965 and 1970, the effect was most pronounced in 1970.