What Explains Fertility? Evidence from Italian Pension Reforms

Francesco C. Billari () and Vincenzo Galasso ()

No 7014, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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: altruism; fertility; old-age security; public pension systems (search for similar items in EconPapers)
JEL-codes: D64 H55 J13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age
Date: 2008-10
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Related works:
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 (2009)
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