What Explains Fertility? Evidence from Italian Pension Reforms

Francesco C. Billari () and Vincenzo Galasso ()

No CESifo Working Paper No. 2646, CESifo Working Paper Series from CESifo Group Munich

Abstract: Why do people have kids in developed societies? We propose an empirical test of two alternative theories — children as “consumption” vs. “investment” good. We use as a natural experiment the Italian pension reforms of the 90s that introduced a clear discontinuity in the treatment across workers. This policy experiment is particularly well suited, since the “consumption” motive predicts lower future pensions to reduce fertility, while the “old-age security” to increase it. Our empirical analysis identifies a clear and robust positive effect of less generous future pensions on post-reform fertility. These findings are consistent with “old-age security” even for contemporary fertility.

Keywords: old-age security; public pension systems; fertility; altruism (search for similar items in EconPapers)
JEL-codes: D64 H55 J13 (search for similar items in EconPapers)
Date: 2009
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Working Paper: What Explains Fertility? Evidence from Italian Pension Reforms (2008)
Working Paper: What Explains Fertility? Evidence from Italian Pension Reforms (2008)
Working Paper: What Explains fertility? Evidence from Italian pension reforms (2008)
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