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). 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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