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Risk aversion and fertility. Evidence from a lottery question in Italy

Daniela Bellani () and Bruno Arpino ()
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Daniela Bellani: Università di Bologna
Bruno Arpino: Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze, https://www.disia.unifi.it

No 2021_02, Econometrics Working Papers Archive from Universita' degli Studi di Firenze, Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti"

Abstract: This article aims at contributing to the literature on fertility decision making process. The authors analyze an overlooked but potentially crucial factor, the preference for risk. A typology of fertility decision making process based on risk tolerance and attractiveness of parenthood is proposed. Empirically, the authors rely on a lottery question included in Italian longitudinal representative data. Results indicate that the most risk averse individuals have the highest probability to have a(n additional) child. This is consistent with the Hedger ideal type that considers children as an insurance. The most risk tolerant individuals, instead, in line with the Individualist type, seem to perceive fertility as incompatible with alternative risky and rewarding behaviors. This conflict results particularly strong for low-income individuals. Our findings point to the importance of considering risk tolerance in fertility research to gain a more complete understanding of heterogeneity in fertility behaviors.

Keywords: fertility; risk aversion; risk preference (search for similar items in EconPapers)
Pages: 79 pages
Date: 2021-02
New Economics Papers: this item is included in nep-eur and nep-upt
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