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Fertility choice and financial development

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  • Filoso, Valerio
  • Papagni, Erasmo

Abstract

We study the consequences of broader access to credit and capital markets on household decisions over the number of children. A model of the net reproduction rate is estimated on data from 78 countries over the period 1995–2010. Liquidity constraints are approximated by private credit and household credit, while opportunities for financial investment are measured by domestic public debt. We use the Index of Financial Liberalisation (Abiad et al., 2009) as one of the instruments for financial variables. We find that improved access to credit increases fertility with an elasticity of around 30%, while the effect of the development of capital markets is negative (–10%). The regression model takes the role of social security into account. Quantile regression shows that our results are robust to outliers and parameter heterogeneity.

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  • Filoso, Valerio & Papagni, Erasmo, 2015. "Fertility choice and financial development," European Journal of Political Economy, Elsevier, vol. 37(C), pages 160-177.
  • Handle: RePEc:eee:poleco:v:37:y:2015:i:c:p:160-177 DOI: 10.1016/j.ejpoleco.2014.11.004
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    Cited by:

    1. George Naufal, 2015. "Impact of remittances on fertility," IZA World of Labor, Institute for the Study of Labor (IZA), pages 207-207.
    2. repec:spr:soinre:v:133:y:2017:i:2:d:10.1007_s11205-016-1382-6 is not listed on IDEAS

    More about this item

    Keywords

    Fertility; Financial market development; Old-age security;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • G1 - Financial Economics - - General Financial Markets

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