The Intergenerational Welfare State

demography is a realm of private decisions with public effects. in both highand low-fertility regimes, families make decisions that significantly influence the well-being of others. excessively rapid population growth can threaten economic and ecological viability. Population decline can threaten cultural continuity and fiscal sustainability. as Paul demeny has warned us, there is no invisible hand in the family that serves to align private and public interests (demeny 1986). Yet as he has also pointed out, the visible hands of the state do not necessarily provide a remedy. By socializing the benefits of childrearing more than the costs, the modern welfare state has encouraged fertility decline below replacement levels, lowering the prospects for future intergenerational transfers and perhaps undermining the welfare state itself (demeny 1987). when demeny expressed concern about the effects of unwittingly antinatalist policies in the mid-1980s, most other demographers remained focused on the opposite problem of rapid population growth. Gradually, however, issues of below-replacement fertility began to garner more attention. demeny’s proposal that we should “privatize” at least some of the economic benefits of childrearing has been taken up by a number of economists and policy experts, including romesh Ponnuru (2012), Shirley Burggraf (1997), and Phillip longman (2004). the serious economic slowdown that began in the united States and europe in 2007 has fueled concerns about ballooning public debt, along with implementation of some strict austerity programs. these current events increase the likelihood that social spending on age-based transfers may be reduced. in this context it seems appropriate to consider both what we know and what we need to know about intergenerational transfers and the welfare state, with a view toward improving equity, efficiency, and sustainability. in this essay, we focus on the uS experience, considering three questions that we deem crucial: 1) why did a welfare state that includes significant intergenerational transfers emerge? 2) How do public and private intergenerational