IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

What Explains Fertility? Evidence from Italian Pension Reforms

  • Billari, Francesco C.
  • Galasso, Vincenzo

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.

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:
Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7014.

in new window

Date of creation: Oct 2008
Date of revision:
Handle: RePEc:cpr:ceprdp:7014
Contact details of provider: Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820

Order Information: Email:

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. Daniela Del Boca & Daniela Vuri, 2006. "The Mismatch between Employment and Child Care in Italy: the Impact of Rationing," Carlo Alberto Notebooks 31, Collegio Carlo Alberto.
  2. Cigno, Alessandro, 1993. "Intergenerational transfers without altruism : Family, market and state," European Journal of Political Economy, Elsevier, vol. 9(4), pages 505-518, November.
  3. repec:oup:qjecon:v:103:y:1988:i:1:p:1-25 is not listed on IDEAS
  4. repec:tpr:qjecon:v:103:y:1988:i:1:p:1-25 is not listed on IDEAS
  5. 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, vol. 51(3), pages 671-699, 08.
  6. Gary S. Becker & Kevin M. Murphy & Robert Tamura, . "Human Capital, Fertility, and Economic Growth," University of Chicago - Population Research Center 90-5a, Chicago - Population Research Center.
  7. Robert Fenge & Volker Meier, 2004. "Are Family Allowances and Fertility-related pensions Siamese Twins?," CESifo Working Paper Series 1157, CESifo Group Munich.
  8. David de la Croix & Matthias Doepke, 2001. "Inequality and Growth: Why Differential Fertility Matters," UCLA Economics Working Papers 803, UCLA Department of Economics.
  9. 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.
  10. 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, vol. 40(8), pages 1561-1589, November.
  11. Matthias Doepke, 2005. "Child mortality and fertility decline: Does the Barro-Becker model fit the facts?," Journal of Population Economics, Springer, vol. 18(2), pages 337-366, 06.
  12. 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., vol. 28(4), pages 641-680.
  13. Oded Galor, 2004. "The Demographic Transition and the Emergence of Sustained Economic Growth," GE, Growth, Math methods 0409005, EconWPA.
  14. Sinn, Hans-Werner, 2004. "The pay-as-you-go pension system as fertility insurance and an enforcement device," Munich Reprints in Economics 938, University of Munich, Department of Economics.
  15. Neher, Philip A, 1971. "Peasants, Procreation, and Pensions," American Economic Review, American Economic Association, vol. 61(3), pages 380-89, June.
  16. repec:fth:sotoec:0031 is not listed on IDEAS
  17. repec:oup:qjecon:v:117:y:2002:i:4:p:1133-1191 is not listed on IDEAS
  18. Jeremy Greenwood & Ananth Seshadri & Guillaume Vandenbroucke, 2002. "The Baby Boom and Baby Bust," Economie d'Avant Garde Research Reports 1, Economie d'Avant Garde.
  19. 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.
  20. Bottazzi, Renata & Jappelli, Tullio & Padula, Mario, 2006. "Retirement expectations, pension reforms, and their impact on private wealth accumulation," Journal of Public Economics, Elsevier, vol. 90(12), pages 2187-2212, December.
  21. Barro, R.J. & Becker, G.S., 1988. "Fertility Choice In A Model Of Economic Growth," University of Chicago - Economics Research Center 88-8, Chicago - Economics Research Center.
  22. repec:oup:qjecon:v:118:y:2003:i:3:p:1075-1119 is not listed on IDEAS
  23. 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, vol. 3(02), pages 165-195, July.
  24. 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, vol. 90(4), pages 806-828, September.
  25. Galasso, Vincenzo & Gatti, Roberta & Profeta, Paola, 2008. "Investing for the Old Age: Pensions, Children and Savings," CEPR Discussion Papers 6825, C.E.P.R. Discussion Papers.
  26. Larry E. Jones & Alice Schoonbroodt & Michèle Tertilt, 2010. "Fertility Theories: Can They Explain the Negative Fertility-Income Relationship?," NBER Chapters, in: Demography and the Economy, pages 43-100 National Bureau of Economic Research, Inc.
  27. 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.
  28. repec:oup:qjecon:v:124:y:2009:i:2:p:771-807 is not listed on IDEAS
  29. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-38, February.
  30. Alesina, Alberto & Giuliano, Paola, 2007. "The Power of the Family," IZA Discussion Papers 2750, Institute for the Study of Labor (IZA).
  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, vol. 87(2), pages 233-251, February.
  32. Michele Boldrin & Mariacristina De Nardi & Larry E. Jones, 2005. "Fertility and Social Security," NBER Working Papers 11146, National Bureau of Economic Research, Inc.
  33. 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, vol. 5(4), pages 319-41.
  34. Paola Giuliano, 2007. "Living Arrangements in Western Europe: Does Cultural Origin Matter?," Journal of the European Economic Association, MIT Press, vol. 5(5), pages 927-952, 09.
  35. 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., vol. 33(1), pages 149-170.
  36. 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.
  37. Newman, John L & McCulloch, Charles E, 1984. "A Hazard Rate Approach to the Timing of Births," Econometrica, Econometric Society, vol. 52(4), pages 939-61, July.
  38. 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, vol. 4(4), pages 800-829, 06.
  39. Samuel Bentolila & Andrea Ichino, 2008. "Unemployment and consumption near and far away from the Mediterranean," Journal of Population Economics, Springer, vol. 21(2), pages 255-280, April.
  40. John Bongaarts, 2004. "Population Aging and the Rising Cost of Public Pensions," Population and Development Review, The Population Council, Inc., vol. 30(1), pages 1-23.
Full references (including those not matched with items on IDEAS)

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

When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:7014. 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: ()

The email address of this maintainer does not seem to be valid anymore. Please ask to update the entry or send us the correct address

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.