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Old Age Pensions Public Expenditures and Fertility in European Countries

  • Cosmin ENACHE

    (Faculty of Economics and Business Administration, West University of Timisoara, Romania)

The economic theory of fertility acknowledges the importance of old age pensions for individual fertility decisions. However, theoretical predictions regarding the sign of this relation differ from altruistic fertility models (positive) to non-altruistic fertility models (negative). First, a cointegration analysis is employed in order to check if there is a long-term equilibrium relationship between public spending on old age pensions and the fertility rate, using a sample of 30 European countries. Second, this relation is estimated using the generalized method of moments for dynamic panel data. The results confirm the predictions of altruistic fertility models. Old age pensions public expenditures are found to have a positive effect on the fertility rate, but with a low magnitude.

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Article provided by West University of Timisoara, Romania, Faculty of Economics and Business Administration in its journal Timisoara Journal of Economics.

Volume (Year): 5 (2012)
Issue (Month): 17 ()
Pages: 119–126

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Handle: RePEc:wun:journl:tje:v05:y2012:i17:a08
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