Advances in understanding incentives to procreate

In this thesis, I study incentives to procreate from three different perspectives. Starting from a historical point of view, the first essay proposes a unified theory of growth and demographic transition. Individuals choose fertility, children’s education and whether to reside in cities or the countryside. Counterfactual experiments for Denmark highlight that in an economy with different incentives to give birth in urban and rural areas, the rural exodus, completing the technological progress, has been a workhorse for the economic take-off and fertility transition. Motivated by extensive changes in age structures, the second essay turns to fertility and longevity in light of optimal populations. The first-best solution for a flexible social welfare function identifies optimal age structures in a 3-period OLG-model with endogenous population dynamics. As individuals over-invest in health and additionally bear a non-optimal number of children, laissez-faire generally fail optimal age structures. A calibration exercise emphasizes that the over-aging of populations crucially depends on social preferences. In the third essay, I take up a specific aspect of the interaction between population dynamics and social security systems: I study how Germany’s different health insurance types alter incentives to give birth. Relying on data from GSOEP, endogenous treatment effects models for count data evidence a higher fertility of privately insured women. A stylized model illustrates that albeit the family insurance of statutorily insured members suggests a higher fertility, lower parental premia in the private health insurance are one mechanism to induce a higher fertility among privately insured parents.(ECGE - Sciences économiques et de gestion) -- UCL, 201