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...aging indirect effects of the welfare state may be mitigated by the fact that marriage has some features that makes it superior relative to the welfare state such as trust and information advantages (=-=Kotlikoff and Spivak, 1981-=-). 5fluence the incidence of divorce, either through the matching function on the marriage market or through assortative mating. In either case, the idea that the welfare state subsidizes or penalize...

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...he literature to quantify the incidence of marriage and divorce seems to be crude marriage and divorce rates: the number of marriages (divorces, respectively) per 1,000 of the total population (e. g. =-=Friedberg, 1998-=-; Wolfers, 2006). While this approach is potentially problematic, since it does not properly consider the population “at risk,” and may therefore hide some of the underlying variation in interest, dat...

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...sting literature. First, we add to the literature that studies the consequences of the welfare state in a general sense (Castles et al., 2010). Second, we add to the literature on demographic trends (=-=Stevenson and Wolfers, 2007-=-). 2 With the exception of the out-of-wedlock ratio, comparably little attention has been paid to the influence of the welfare state on demographic outcomes. 3 In the public debate, the dominant view ...

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...sting literature. First, we add to the literature that studies the consequences of the welfare state in a general sense (Castles et al., 2010). Second, we add to the literature on demographic trends (=-=Stevenson and Wolfers, 2007-=-). 2 With the exception of the out-of-wedlock ratio, comparably little attention has been paid to the influence of the welfare state on demographic outcomes. 3 In the public debate, the dominant view ...

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...greater extent. In this case, total public spending may be lower, albeit each group pushes for an inefficiently expensive project. The empirical evidence is also mixed. A number of studies (see e. g. =-=Roubini and Sachs, 1989-=-,b; Persson and Tabellini, 2004, among others) find that more fragmented governments lead to higher spending and deficits. However, as pointed out by Acemoglu (2005), these results may be subject to a...

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...e, total public spending may be lower, albeit each group pushes for an inefficiently expensive project. The empirical evidence is also mixed. A number of studies (see e. g. Roubini and Sachs, 1989,b; =-=Persson and Tabellini, 2004-=-, among others) find that more fragmented governments lead to higher spending and deficits. However, as pointed out by Acemoglu (2005), these results may be subject to a substantial endogeneity bias, ...

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...nomic independence of women (Isen and Stevenson, 2011), access to abortion and oral contraception (Akerlof, Yellen and Katz, 1996; Goldin and Katz, 2000, 2002), changes in divorce law (Wolfers, 2006; =-=Rasul, 2006-=-; Matouschek and Rasul, 2008), and reforms of custody law (Halla, 2013). 3A notable exception is Björklund (2006) who identifies a positive effect of the Swedish family policy on the overall fertility...

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...dence of women (Isen and Stevenson, 2011), access to abortion and oral contraception (Akerlof, Yellen and Katz, 1996; Goldin and Katz, 2000, 2002), changes in divorce law (Wolfers, 2006; Rasul, 2006; =-=Matouschek and Rasul, 2008-=-), and reforms of custody law (Halla, 2013). 3A notable exception is Björklund (2006) who identifies a positive effect of the Swedish family policy on the overall fertility level. 4Earlier papers eval...

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...may exert a direct influence on fertility by providing subsidies that at least partly compensate the costs of child care by providing, for instance, subsidized health care for children and education (=-=Cigno, 1986-=-). We refer to these effects of the welfare state as the direct effects, since a change in either marital status or fertility directly results in a change in disposable income that varies across diffe...

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...anation for the conflicting empirical evidence is a lack of econometric identification. Moffitt (1998) argues that many 2Economic scholars have studied the role of the economic independence of women (=-=Isen and Stevenson, 2011-=-), access to abortion and oral contraception (Akerlof, Yellen and Katz, 1996; Goldin and Katz, 2000, 2002), changes in divorce law (Wolfers, 2006; Rasul, 2006; Matouschek and Rasul, 2008), and reforms...

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...etical Considerations Typical real-world welfare state arrangements incorporate explicit subsidies for certain family arrangements. Besides explicit marriage-promoting polices (Gardiner et al., 2002; =-=Brotherson and Duncan, 2004-=-), many transfer programs and tax codes include implicit incentives to adjust marital status. In other words, the (welfare) state may directly influence the utility of being married versus being singl...

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...2 groups). Regarding the divorce law, we distinguish between regimes where (i) divorce is not possible at all, (ii) where only mutual consent divorce is available, and (iii) where unilateral divorce (=-=González and Viitanen, 2009-=-) is also possible. The U.S. is the only country with within-country variation in divorce law, with states switching to unilateral divorce law in different years. For the analysis, we impute the media...

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...tion and oral contraception (Akerlof, Yellen and Katz, 1996; Goldin and Katz, 2000, 2002), changes in divorce law (Wolfers, 2006; Rasul, 2006; Matouschek and Rasul, 2008), and reforms of custody law (=-=Halla, 2013-=-). 3A notable exception is Björklund (2006) who identifies a positive effect of the Swedish family policy on the overall fertility level. 4Earlier papers evaluate the effect of Aid to Families with De...

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...t effects on family formation and dissolution by providing services that were traditionally provided 6 Among more recent papers, there exist a handful of random assignment studies (see, for instance, =-=Hu, 2003-=-). Another related strand of literature focuses on the effects of tax law on the incidence of marriage (Alm, Dickert-Conlin and Whittington, 1999) and divorce. 7 It seems practically impossible to cat...

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...ed countries provide or at least subsidize these services, for instance, through public health and unemployment insurance. Thus, the role of the family may have become less important in this respect (=-=Anderberg, 2007-=-), and the incentives to form a family may have decreased along with the introduction of comprehensive welfare state arrangements. Nevertheless, the implementation of welfare state arrangements may in...