Is there any country on earth that partly bases retirement benefits on the retirees’ number of children?
May 25 2010
Mankiw hits a home run in a short space. In a blog post on Sunday, Greg Mankiw hit a home run in discussing the sale of kidneys. It's so well done, and so succinctly done, that there's no point in my trying to summarize it.
May 25 2010
I'm asking Bryan. "Pessimistic bias" is one of the four biases he finds among people who are ignorant of economics. He also claims that educated people are generally better than the less-educated on economic issues. But in an interview with James Pethokoukis, Matt Ridley says, You did not ask me why intellectuals a...
May 25 2010
Is there any country on earth that partly bases retirement benefits on the retirees' number of children?
READER COMMENTS
marko
May 25 2010 at 3:58pm
Well, not directly, but in Serbia, and I guess in many other countries, the government pays full salaries to mothers while being on maternity leave of up to one year (and up to two years for third and more children) and time spent on maternity leave is counted as employment in terms of pension eligibility. If a woman has three children, for example, she basically gets 4 years “for free”.
So, women don’t actually get higher pensions based on the number of children but get to work much less.
Ramon
May 25 2010 at 4:29pm
Salaries in the public sector in Germany are higher by a certain amount according to the number of children the employee has. They are explicit in that between two equally meritorious employees, the one with more children deserves to make more.
This most likely translated into higher pensions, at least for thos who retire with children below a certain age.
Gu Si Fang
May 25 2010 at 5:43pm
In France, a female civil servant gets extra retirement years (gets to retire earlier) for each child starting with the 3rd.
Martin S
May 25 2010 at 6:57pm
Yes, in Germany. In 1992 Rosa Rees, who had raised nine kids sued the Federal Republic: Her children contributed each month more than 8000 DM (maybe $5000) to Germany’s social security. Ms Rees however got a pension of only 350 DM (maybe 200USD or so). She won, so since then social security in Germany takes into account how many children one has raised.
I have no idea how much it matters in practice, probably not a lot.
Steve Sailer
May 25 2010 at 6:59pm
Social Security payouts should partly be tied to how much your children and grandchildren have been paying in.
Steve Sailer
May 25 2010 at 7:01pm
You shouldn’t be rewarded for having six kids on welfare but you should be rewarded for having descendants who are paying in a lot of taxes.
That would put the incentives in the right direction. Moreover, and quite possibly more importantly, it would be a statement of whom society honors and whom it doesn’t.
Sam
May 25 2010 at 10:02pm
Off topic, I was recently shocked to learn that Canada actually holds assets (other than gov’t bonds) against its future pension obligations, see for example http://www.cppib.ca/
CPP benefits do not depend on the number of descendents, however.
Practically speaking, if you had a retirement plan that indexed benefits to the count of children and grandchildren, how would adoption work? Should you subtract adopted children from the birth parents’ pensions and add them to the adopting parents? Is it better to birth three children or sponsor two adult immigrants (who do not consume expensive public education)? etc.
MikeP
May 25 2010 at 11:04pm
The Soviet Union had a number of awards presented to mothers who had three or more children. I believe those awards also carried with them better pensions as well increased access to food and other goods. The larger the number of children, the higher the award, and the higher the award, the greater the benefits that accompanied it.
Stephen W. Stanton
May 26 2010 at 1:55am
Look into UAE, Qatar, and Kuwait.
Based on anecdotal evidence, government benefits increase with family size. The citizens are outnumbered by expats, and they are trying to breed their way into sustainable equilibrium.
You need to do the research to verify the anecdotes.
Yehuda
May 26 2010 at 3:45am
In the Czech Republic, women are eligible to retire up to 3 years early, based on the number of children they raised, with no penalty.
Babinich
May 26 2010 at 5:39am
Hmm, interesting…
A benefit is provided after the woman has (in all likelihood) raised her children and seen them off into the world.
staticvars
May 26 2010 at 2:36pm
I think several religions encourage this behavior.
For each one in prison you could lose credit for two.
I can see the argument for making the benefit lower based on number of children. I send money to the parents every month. Thanks Confucius.
Van Veraf
May 26 2010 at 4:31pm
South Africa has no direct pension encouragement based on the number of children one has, but there are several measures that might incentivise child bearing, including
1. Allowance for mothers OR caretakers of children 18 and younger. ipsnews.net/news.asp?idnews=50402
2. The fact that with a 25% unemployment rate many families live off the old age pensions of the elderly family members, which adds to the marginal effect of point one.
More info here:capegateway.gov.za/eng/directories/services/11586
15million out of 45million in this country are on welfare – a third of the country!
Martin S
May 27 2010 at 2:49pm
Update on Germany:
Per child one parent (the parent who did more to raise the child) gets an additional pension as if he/she had for the first three years of the child’s life paid contributions like the average employee (currently each such year is worth and additional monthly retirement payment of 26,50 EUR per month). For example a mother living in West Germany with three children born all after 1991 would receive 234 EUR more per month.
That is larger than I thought. Though as there is a cap on maximal amounts (complicated) as you go from 90% of average contributions it starts to get taxed away and at 200% of average contributions it is worth zero. Since there is a cap on contributions (just like in US Social Security) that hits far lower down the distribution than one would think.
Another way to look at this total numbers and current retirees:
In 2005 total spending on this benefit was roughly 11bn EUR. There are about 25mn recipients, if each of them has on average one child (an upper bound given German fertility levels a generation ago) then for each child on average 440EUR per year or about 40 EUR a month.
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