Fertility and Social Security

Posted: 25 Jul 2008

See all articles by Michele Boldrin

Michele Boldrin

University of Minnesota - Twin Cities - Department of Economics; Universidad Carlos III de Madrid - Department of Economics; Centre for Economic Policy Research (CEPR)

Mariacristina De Nardi

University College London, Economics Dpt.; Federal Reserve Bank of Chicago; National Bureau of Economic Research (NBER) - Public Economics

Larry Jones

University of Minnesota - Twin Cities - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: March 2005

Abstract

The data show that an increase in government provided old-age pensions is strongly correlated with a reduction in fertility. What type of model is consistent with this finding? We explore this question using two models of fertility: one by Barro and Becker (1989), and one inspired by Caldwell (1978, 1982) and developed by Boldrin and Jones (2002). In Barro and Becker's model parents have children because they perceive their children's lives as a continuation of their own. In Boldrin and Jones' framework parents procreate because children care about their parents' utility, and thus provide them with old-age transfers. The effect of increases in government provided pensions on fertility in the Barro and Becker model is very small, whereas the effect on fertility in the Boldrin and Jones model is sizeable and accounts for between 55 and 65% of the observed Europe-U.S. fertility differences both across countries and across time.

Keywords: Fertility, Intra-family transfers, Social Security, Financial Markets

JEL Classification: E10, J10, J13, O10

Suggested Citation

Boldrin, Michele and De Nardi, Mariacristina and Jones, Larry E., Fertility and Social Security (March 2005). Available at SSRN: https://ssrn.com/abstract=1174402

Michele Boldrin (Contact Author)

University of Minnesota - Twin Cities - Department of Economics ( email )

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Universidad Carlos III de Madrid - Department of Economics

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Centre for Economic Policy Research (CEPR)

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Mariacristina De Nardi

University College London, Economics Dpt. ( email )

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Larry E. Jones

University of Minnesota - Twin Cities - Department of Economics ( email )

271 19th Avenue South
Minneapolis, MN 55455
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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