This paper uses data on fertility and financial development in 19th century U.S. to test the hypothesis that more developed local financial markets reduce the incentives for families to have a large offspring to provide for them at old age, the so-called old-age security hypothesis. We find that the presence of banks is associated to lower children-to-women ratios and crude birth rates even after controlling for a large set of socio-economic factors. To account for possible endogeneity of bank location we instrument for the presence of some banking activity in a given county in 1840 with the existence of at least a bank in that county in 1820. The results of using this identification strategy are in line with the OLS ones, namely that fertility in 1850 is negatively affected by financial development. Next we explore the relationship between banking activity and fertility in the state of Pennsylvania, where, by law, most banks were created before 1820. This allows us to treat banks in 1840 as exogenous and confirm the existence of a strong negative causal effect from financial development to fertility. Finally, we show that our results are robust to measuring banking activity with the number of cities with at least a bank in a given county.

Summary Using an unbalanced panel covering the period 1870‐2000, we find that democracy favours fertility declines. This result suggests that democratic and autocratic environments might affect differently the proximate determinants of fertility. In our analysis we show that democracy affects fertility after controlling for education, mortality risk and GDP per capita. This paper adds to the literature that addresses the issue of identifying how democracy might affect development by identifying and assessing the relevance of a specific mechanism: that is, fostering the fertility transition.

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This paper documents a positive correlation between the genetic distance to the world technological frontier (United Kingdom, United States) and the year of the onset of the fertility transition across countries. This result is robust to controlling for a large set of geographical, climatic, historical, and institutional variables. Two main mechanisms could explain this reduced-form relationship. First, genetic distance to the world technological frontier can affect the onset of the fertility transition through its impact on the timing and intensity of technology adoption. Second, genetic distance to the technological frontier can capture other cultural differences and the process of diffusion of cultural norms that are related to fertility but not through technology adoption. We find suggestive evidence supporting both mechanisms.

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