What Explains Fertility? Evidence from Italian Pension Reforms

48 Pages Posted: 19 May 2009

See all articles by Francesco C. Billari

Francesco C. Billari

Bocconi University - Department of Policy Analysis and Public Management

Vincenzo Galasso

Centre for Economic Policy Research (CEPR); Bocconi University; University of Bocconi - Innocenzo Gasparini Institute for Economic Research (IGIER); CESifo (Center for Economic Studies and Ifo Institute); Bocconi University - Baffi Carefin Centre

Multiple version iconThere are 2 versions of this paper

Date Written: May 2009

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

JEL Classification: H55, J13, D64

Suggested Citation

Billari, Francesco C. and Galasso, Vincenzo and Galasso, Vincenzo, What Explains Fertility? Evidence from Italian Pension Reforms (May 2009). CESifo Working Paper Series No. 2646, Available at SSRN: https://ssrn.com/abstract=1406946 or http://dx.doi.org/10.2139/ssrn.1406946

Francesco C. Billari

Bocconi University - Department of Policy Analysis and Public Management ( email )

Via Roentgen 1
Milan, 20136
Italy

Vincenzo Galasso (Contact Author)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Bocconi University ( email )

Via Roetgen 1
20136 Milan, MI 20136
Italy

University of Bocconi - Innocenzo Gasparini Institute for Economic Research (IGIER)

Via Roentgen 1
Milan, 20136
Italy
+39 02 5836 5319 (Phone)
+39 02 5836 5318 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Bocconi University - Baffi Carefin Centre ( email )

Via Roentgen 1
Milan
Italy

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