Seminario Children of the Reich: parental selection and long-term labor market outcomes in Austria 1938-2010

Abstract

In 1938-40, following the country’s annexation by Germany,  Austria experienced unprecedented increase in marriage rates and fertility. We examine long-term outcomes for those born during this temporary surge in child-bearing, analyzing their earnings at ages 40-65, using individual-level social security records. “Children of the Reich” earned more, had better educational outcomes, worked more often in white collar jobs, and were more likely to become “famous”. Changes of long-term outcomes for this cohort are sharp and discontinuous, starting immediately for those born 9 months after the German invasion. Changes in parental “quality” are a key driver of better outcomes – highly-educated parents living in urban locations and working in white collar jobs saw a particularly pronounced baby boom nine months after the invasion. Systematic comparisons with Germany, Switzerland, and the US show that no other country experienced comparable birth increases at this time nor did the earnings of these cohorts differ from the earnings of cohorts born slightly earlier. We argue that geographical, occupational and educational patterns of the baby boom are broadly consistent with standard economic models of fertility, according to which an increase in expected family income and (male) wages increases the quantity and quality of children. We do not find that the baby boom was larger in locations where the Nazis had strong support in national and regional elections before the Anschluss. Nor do we find any correlation between the local increase in births and subsequent vote shares for the FPÖ, a far-right populist party whose party leaders and party officials frequently come out as apologets of – if not sympathizers with – Nazi policies and ideology. We conclude that a generalized boost in economic sentiment, and not Nazi sympathies or partisan preferences for unification with Germany, were key for one of history’s most dramatic baby boom.