Have More Children?
The incentive to have children is reduced in a welfare state, according to Pavel Kohout.
To put it straightforwardly, and perhaps a little cynically, in the past children used to be regarded as investments that provided their parents with means of subsistence in old age…whereas today’s anonymous system makes all workers pay for the pensions of all retirees in an utterly depersonalized manner.
This system enables huge numbers of “free riders” to receive more than what would correspond to their overall contribution in their productive life. Those with incomes way above the average, on the contrary, are penalized, as the system gives them less money than they contributed to it. This is referred to as the “solidarity principle”. In terms of birth rate, this arrangement is discouraging for both the low-income group and the high-income one. The latter feel that they are not going to need children in the old age, while the former believe that they can’t afford to have them.
Today, children no longer represent investments; instead, they have become pets – objects of luxury consumption. However, the pet market segment is very competitive…today there are many young couples that have consciously decided to have a dog instead of a baby.
Apparently, guest-blogger Bryan Caplan’s argument for the selfish reason to have more children is not persuasive.
For Discussion. Does the claim that the welfare state reduces natality go beyond casual empiricism? Has it been tested rigorously?