Advanced Search
MyIDEAS: Login to save this paper or follow this series

What Explains fertility? Evidence from Italian pension reforms

Contents:

Author Info

  • Francesco C.Billari
  • Vincenzo Galasso

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.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: ftp://ftp.igier.uni-bocconi.it/wp/2008/343.pdf
Download Restriction: no

Bibliographic Info

Paper provided by IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University in its series Working Papers with number 343.

as in new window
Length:
Date of creation: 2008
Date of revision:
Handle: RePEc:igi:igierp:343

Contact details of provider:
Postal: via Rontgen, 1 - 20136 Milano (Italy)
Phone: 0039-02-58363301
Fax: 0039-02-58363302
Web page: http://www.igier.unibocconi.it/

Order Information:
Email:
Web: http://www.igier.unibocconi.it/en/papers/index.htm

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Jeremy Greenwood & Ananth Seshadri & Guillaume Vandenbroucke, 2002. "The Baby Boom and Baby Bust," Economie d'Avant Garde Research Reports, Economie d'Avant Garde 1, Economie d'Avant Garde.
  2. Galor, Oded & Moav, Omer, 2001. "Natural Selection and the Origin of Economic Growth," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2727, C.E.P.R. Discussion Papers.
  3. John Bongaarts, 2004. "Population Aging and the Rising Cost of Public Pensions," Population and Development Review, The Population Council, Inc., The Population Council, Inc., vol. 30(1), pages 1-23.
  4. Xavier Mateos-Planas, 2002. "The Demographic Transition in Europe: A Neoclassical Dynastic Approach," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(3), pages 646-680, July.
  5. Brugiavini, Agar & Galasso, Vincenzo, 2004. "The social security reform process in Italy: where do we stand?," Journal of Pension Economics and Finance, Cambridge University Press, Cambridge University Press, vol. 3(02), pages 165-195, July.
  6. Bottazzi, Renata & Jappelli, Tullio & Padula, Mario, 2006. "Retirement expectations, pension reforms, and their impact on private wealth accumulation," CFS Working Paper Series, Center for Financial Studies (CFS) 2006/10, Center for Financial Studies (CFS).
  7. David de la Croix & Matthias Doepke, 2003. "Inequality and Growth: Why Differential Fertility Matters," American Economic Review, American Economic Association, American Economic Association, vol. 93(4), pages 1091-1113, September.
  8. Michele Boldrin & Larry E. Jones, 2002. "Mortality, Fertility, and Saving in a Malthusian Economy," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(4), pages 775-814, October.
  9. Robert Fenge & Volker Meier, 2004. "Are Family Allowances and Fertility-related pensions Siamese Twins?," CESifo Working Paper Series 1157, CESifo Group Munich.
  10. Daniela Del Boca & Daniela Vuri, 2006. "The Mismatch between Employment and Child Care in Italy: the Impact of Rationing," Carlo Alberto Notebooks, Collegio Carlo Alberto 31, Collegio Carlo Alberto.
  11. Becker, Gary S & Barro, Robert J, 1988. "A Reformulation of the Economic Theory of Fertility," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 103(1), pages 1-25, February.
  12. Oded_Galor, 2004. "The Demographic Transition and the Emergence of Sustained Economic Growth," Working Papers 2004-13, Brown University, Department of Economics.
  13. Newman, John L & McCulloch, Charles E, 1984. "A Hazard Rate Approach to the Timing of Births," Econometrica, Econometric Society, Econometric Society, vol. 52(4), pages 939-61, July.
  14. Orazio P. Attanasio & Agar Brugiavini, 2003. "Social Security And Households' Saving," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 118(3), pages 1075-1119, August.
  15. Hans-Peter Kohler & Francesco C. Billari & José Antonio Ortega, 2002. "The Emergence of Lowest-Low Fertility in Europe During the 1990s," Population and Development Review, The Population Council, Inc., The Population Council, Inc., vol. 28(4), pages 641-680.
  16. Barro, R.J. & Becker, G.S., 1988. "Fertility Choice In A Model Of Economic Growth," University of Chicago - Economics Research Center, Chicago - Economics Research Center 88-8, Chicago - Economics Research Center.
  17. Galasso, Vincenzo & Gatti, Roberta & Profeta, Paola, 2008. "Investing for the Old Age: Pensions, Children and Savings," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6825, C.E.P.R. Discussion Papers.
  18. Giuliano, Paola, 2006. "Living Arrangements in Western Europe: Does Cultural Origin Matter?," IZA Discussion Papers 2042, Institute for the Study of Labor (IZA).
  19. Larry E. Jones & Alice Schoonbroodt & Michèle Tertilt, 2008. "Fertility Theories: Can They Explain the Negative Fertility-Income Relationship?," NBER Working Papers 14266, National Bureau of Economic Research, Inc.
  20. Alesina, Alberto & Giuliano, Paola, 2007. "The Power of the Family," IZA Discussion Papers 2750, Institute for the Study of Labor (IZA).
  21. Sinn, Hans-Werner, 2004. "The pay-as-you-go pension system as fertility insurance and an enforcement device," Munich Reprints in Economics, University of Munich, Department of Economics 19606, University of Munich, Department of Economics.
  22. Larry E. Jones & Alice Schoonbroodt, 2007. "Complements versus Substitutes and Trends in Fertility Choice in Dynastic Models," NBER Working Papers 13680, National Bureau of Economic Research, Inc.
  23. Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters, National Bureau of Economic Research, Inc, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 323-350 National Bureau of Economic Research, Inc.
  24. Cigno, Alessandro, 1993. "Intergenerational transfers without altruism : Family, market and state," European Journal of Political Economy, Elsevier, Elsevier, vol. 9(4), pages 505-518, November.
  25. Matthias Doepke, 2002. "Child Mortality and Fertility Decline: Does the Barro-Becker Model Fit the Facts?," UCLA Economics Working Papers, UCLA Department of Economics 824, UCLA Department of Economics.
  26. Marco Manacorda & Enrico Moretti, 2006. "Why do Most Italian Youths Live with Their Parents? Intergenerational Transfers and Household Structure," Journal of the European Economic Association, MIT Press, MIT Press, vol. 4(4), pages 800-829, 06.
  27. Cigno, Alessandro & Rosati, Furio Camillo, 1992. "The Effects of Financial Markets and Social Security on Saving and Fertility Behaviour in Italy," Journal of Population Economics, Springer, Springer, vol. 5(4), pages 319-41.
  28. van Groezen, Bas & Leers, Theo & Meijdam, Lex, 2003. "Social security and endogenous fertility: pensions and child allowances as siamese twins," Journal of Public Economics, Elsevier, Elsevier, vol. 87(2), pages 233-251, February.
  29. Rodolfo E. Manuelli & Ananth Seshadri, 2009. "Explaining International Fertility Differences," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 124(2), pages 771-807, May.
  30. Michele Boldrin & Mariacristina De Nardi & Larry E. Jones, 2005. "Fertility and Social Security," NBER Working Papers 11146, National Bureau of Economic Research, Inc.
  31. Sinn, Hans-Werner, 1998. "The Pay-As You-Go Pension System as a Fertility Insurance and Enforcement Device," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2023, C.E.P.R. Discussion Papers.
  32. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 57(1), pages 129-38, February.
  33. Francesco C. Billari & Hans-Peter Kohler & Gunnar Andersson & Hans Lundström, 2007. "Approaching the Limit: Long-Term Trends in Late and Very Late Fertility," Population and Development Review, The Population Council, Inc., The Population Council, Inc., vol. 33(1), pages 149-170.
  34. Samuel Bentolila & Andrea Ichino, 2008. "Unemployment and consumption near and far away from the Mediterranean," Journal of Population Economics, Springer, Springer, vol. 21(2), pages 255-280, April.
  35. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, American Economic Association, vol. 90(4), pages 806-828, September.
  36. Cigno, Alessandro & Rosati, Furio C., 1996. "Jointly determined saving and fertility behaviour: Theory, and estimates for Germany, Italy, UK and USA," European Economic Review, Elsevier, Elsevier, vol. 40(8), pages 1561-1589, November.
  37. Neher, Philip A, 1971. "Peasants, Procreation, and Pensions," American Economic Review, American Economic Association, American Economic Association, vol. 61(3), pages 380-89, June.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. M.L. Leroux & P. Pestieau, 2014. "Social Security and Family Support," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 47(1), pages 115-143, February.
  2. Michael Funke & Marc Gronwald, 2009. "A Convex Hull Approach to Counterfactual Analysis of Trade Openness and Growth," CESifo Working Paper Series 2692, CESifo Group Munich.
  3. Mikko Puhakka & Matti Viren, 2012. "Social Security, Saving and Fertility," Finnish Economic Papers, Finnish Economic Association, Finnish Economic Association, vol. 25(1), pages 28-42, Spring.
  4. Melinda Mills & Nicoletta Balbo, 2011. "The influence of the family network on the realisation of fertility intentions," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 9(1), pages 179-206.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:igi:igierp:343. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.