..The final step came ... when the Swedish government implemented a program of old-age or retirement pensions that quickly became universal. The underlying act here was the socializing of another dependency function, this time, the dependency of the "very old" and the "weak" on mature adults. For eons, the care of the elderly had been a family matter. Henceforward, it would be the state's concern. Taking all of these reforms together, the net effect was to socialize the economic value of children. The natural economy of the household, and the value that children had brought their parents—be it as workers in the family enterprise or as an 'insurance policy' for old age—was stripped away. Parents were still left with the costs of raising the children, but the economic gain they would eventually represent had been seized by "society," meaning the bureaucratic state.
The predictable result of this change, as an economist of the "Gary Becker School" would tell you, would be a diminished demand for children, and this is exactly what occurred in Sweden. Starting in the late 1800s, Swedish fertility went into free-fall and by 1935, Sweden had the lowest birthrate in the world, below the zero-growth level where a generation just managed to replace itself.
Allan Carlson at the Ludwig von Mises Institute explains how the welfare state means fewer rug-rats. And the solution to this problem? Simple:
The agenda here is simple, radical and pragmatically anti-bureaucratic:
1. end state-mandated and state-controlled education, leaving the training and rearing of children up to their own parents or legal guardians;
2. abolish child-labor laws, again reasoning that parents or guardians are the best judges of their children's interests and welfare, vastly better than any combination of state bureaucrats;
3. and dismantle the Social Security system, leaving protection or security in old age to be provided, once again, by individuals and their families.
These acts would restore the economic benefits of children to parents, and so end the anti-child contradiction that lies at the center of the incomplete welfare state.
(Link via John Ray)