Pensions and Fertility: Micro-Economic Evidence

This study identifies the causal effect of pension generosity on women's fertility behavior. It capitalizes on Brazil's expansion of the pension system to rural workers, whose pension wealth subsequently more than tripled. Event study, difference-in-differences and instrumental variable methods show that the pension reform reduces the propensity of childbearing of women in fertile age by 10% in the short-run. Completed fertility declines by 1.3 children within 20 years after the reform, reducing the contribution base of the Pay-As-You-Go pension system in the long-run. The fertility response is strongest at higher birth parities, among older women and among mothers with sons.

Keywords: pension wealth, fertility, old-age security hypothesis, quasi-experiment, PAYG, Brazil

JEL Classification: J130, I380, H550, D150

Suggested Citation: Suggested Citation

Danzer, Alexander and Zyska, Lennard, Pensions and Fertility: Micro-Economic Evidence (2020). CESifo Working Paper No. 8173, Available at SSRN: https://ssrn.com/abstract=3564878 or http://dx.doi.org/10.2139/ssrn.3564878

Alexander Danzer (Contact Author)

Catholic University of Eichstaett-Ingolstadt ( email )

Auf der Schanz 49
Ingolstadt, D-85049
Germany

Lennard Zyska

KU Eichstaett-Ingolstadt - Department of Economics and Business Administration ( email )

Auf der Schanz 49
Ingolstadt, D-85049
Germany
+049 (0) 841 / 937 - 21836 (Phone)

Leibniz University Hannover ( email )

Königsworther Platz 1
Hannover, 30167
Germany

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Pensions and Fertility: Micro-Economic Evidence

Alexander Danzer

Lennard Zyska