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

What explains fertilit? Evidence from Italian Pension reforms

Contents:

Author Info

  • Francesco Billari
  • Vincenzo Galasso

Abstract

Why do people have kids in developed societies? We propose an empirical test of two economic theories of fertility — children as “consumption” or “investment” good. We use as a natural experiment the Italian pension reforms of the 90s, which by decreasing expected pension benefits generated a large negative income effect, with a sharp discontinuity across workers. This policy experiment is particularly well suited, since lower future pensions are expected to have differential effects on fertility under the “consumption” and "investment" theories. Empirical analyses identify a causal, robust positive effect of less generous future pensions on postreform fertility. These findings are consistent with an “old-age security” motive also for contemporary fertility in advanced societies or with the original Becker- Lewis (1973) version of the “consumption” theory, based on the interaction between quantity and quality of children.

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.unibocconi.it/wp/2010/369.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 369.

as in new window
Length:
Date of creation: 2010
Date of revision:
Handle: RePEc:igi:igierp:369

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:

This paper has been announced in the following NEP Reports:

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. Gary S. Becker & Robert J. Barro, 1986. "A Reformulation of the Economic Theory of Fertility," NBER Working Papers 1793, National Bureau of Economic Research, Inc.
  2. Agar Brugiavini & Vincenzo Galasso, 2003. "The Social Security Reform Process in Italy: Where do We Stand?," Working Papers, University of Michigan, Michigan Retirement Research Center wp052, University of Michigan, Michigan Retirement Research Center.
  3. Alberto Alesina & Paola Giuliano, 2010. "The power of the family," Journal of Economic Growth, Springer, Springer, vol. 15(2), pages 93-125, June.
  4. Michele Boldrin & Mariacristina De Nardi & Larry E. Jones, 2005. "Fertility and Social Security," Staff Report, Federal Reserve Bank of Minneapolis 359, Federal Reserve Bank of Minneapolis.
  5. David de la Croix & Matthias Doepke, 2001. "Inequality and Growth: Why Differential Fertility Matters," UCLA Economics Working Papers, UCLA Department of Economics 803, UCLA Department of Economics.
  6. Sinn, Hans-Werner, 2004. "The pay-as-you-go pension system as fertility insurance and an enforcement device," Journal of Public Economics, Elsevier, Elsevier, vol. 88(7-8), pages 1335-1357, July.
  7. 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.
  8. Paola Giuliano, 2005. "Living Arrangements in Western Europe: Does Cultural Origin Matter?," 2005 Meeting Papers, Society for Economic Dynamics 189, Society for Economic Dynamics.
  9. Matthias Doepke, 2005. "Child mortality and fertility decline: Does the Barro-Becker model fit the facts?," Journal of Population Economics, Springer, Springer, vol. 18(2), pages 337-366, 06.
  10. 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.
  11. Hans-Werner Sinn, 1998. "The Pay-As-You-Go Pension System as a Fertility Insurance and Enforcement Device," NBER Working Papers 6610, National Bureau of Economic Research, Inc.
  12. Robert J. Barro & Gary S. Becker, . "Fertility Choice in a Model of Economic Growth," University of Chicago - Population Research Center, Chicago - Population Research Center 88-8, Chicago - Population Research Center.
  13. Larry E. Jones & Alice Schoonbroodt, 2010. "Complements Versus Substitutes And Trends In Fertility Choice In Dynastic Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(3), pages 671-699, 08.
  14. Oded Galor & Omer Moav, 2000. "Natural Selection and the Origin of economic Growth," Working Papers 2000-18, Brown University, Department of Economics.
  15. Vincenzo Galasso & Roberta Gatti & Paola Profeta, 2009. "Investing for the old age: pensions, children and savings," International Tax and Public Finance, Springer, Springer, vol. 16(4), pages 538-559, August.
  16. 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.
  17. 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.
  18. Neher, Philip A, 1971. "Peasants, Procreation, and Pensions," American Economic Review, American Economic Association, American Economic Association, vol. 61(3), pages 380-89, June.
  19. Jeremy Greenwood & Ananth Seshadri & Guillaume Vandenbroucke, 2005. "The Baby Boom and Baby Bust," American Economic Review, American Economic Association, American Economic Association, vol. 95(1), pages 183-207, March.
  20. 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.
  21. Galor, Oded, 2004. "The Demographic Transition and the Emergence of Sustained Economic Growth," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4714, C.E.P.R. Discussion Papers.
  22. Becker, Gary S & Murphy, Kevin M & Tamura, Robert, 1990. "Human Capital, Fertility, and Economic Growth," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 98(5), pages S12-37, October.
  23. Volker Meier & Robert Fenge, 2004. "Are Family Allowances And Fertility-Related Pensions Siamese Twins?," Royal Economic Society Annual Conference 2004, Royal Economic Society 125, Royal Economic Society.
  24. Larry E. Jones & Alice Schoonbroodt & Michèle Tertilt, 2010. "Fertility Theories: Can They Explain the Negative Fertility-Income Relationship?," NBER Chapters, National Bureau of Economic Research, Inc, in: Demography and the Economy, pages 43-100 National Bureau of Economic Research, Inc.
  25. 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.
  26. Mateos-Planas, Xavier, 2000. "The European demographic transition," Discussion Paper Series In Economics And Econometrics, Economics Division, School of Social Sciences, University of Southampton 0031, Economics Division, School of Social Sciences, University of Southampton.
  27. Daniela Del Boca & Daniela Vuri, 2006. "The Mismatch between Employment and Child Care in Italy: the Impact of Rationing," CHILD Working Papers, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY wp08_06, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  28. 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.
  29. 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.
  30. 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.
  31. 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.
  32. 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.
  33. 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).
  34. 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.
  35. 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.
  36. 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.
  37. 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.
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. LEROUX, Marie-Louise & PESTIEAU, Pierre, 2011. "Social security and family support," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2011045, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  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. 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.
  4. 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.

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:369. 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.