Childless aristocrats. Inheritance and the extensive margin of fertility

We provide new evidence on the two-way link between fertility decisions on the extensive margin and inheritance. We focus on settlements, a popular inheritance scheme among British aristocrats that combined primogeniture and a one-generation entail of the family estates. Using peerage records (1650-1882), we find that settlements affected the extensive margin of fertility: they reduced childlessness rates by 14.7 pp., ensuring the survival of aristocratic dynasties. Since settlements were signed only if the family head survived until his heir's wedding, we establish causality by exploiting variation in the heirs birth order. Next, we show that the extensive margin of fertility can shape inheritance rules. We build a model with inter-generational hyperbolic discounting where inheritance rules affect fertility and, in turn, schemes restricting successors (e.g., settlements or trusts) emerge endogenously in response to concerns over the dynasty's survival. These results highlight the importance of fertility decisions for the analysis of inheritance.