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Roadblocks on the Road to Grandma's House: Fertility Consequences of Delayed Retirement

  • Battistin, Erich

    ()

    (Queen Mary, University of London)

  • De Nadai, Michele

    ()

    (University of Padova)

  • Padula, Mario

    ()

    (Ca' Foscari University of Venice)

This paper investigates the role of childcare provided by grandparents for the fertility decisions of their offspring. We exploit a decade of pension reforms in Italy that mandated the grandparental generation to a working horizon longer than they would have had otherwise. We argue that the rise in retirement age meant a negative shock to the supply of informal childcare for the next generation. Our results show that one additional grandparent available in the early child-bearing years increases by about five percent the number of children. We show that the fertility effects of delayed retirement are limited to close-knits with a strong familistic structure. The result is not just the mechanical consequence of delayed exit from parental home, of more investment in education or of more attachment to the labour market. In light of the Italian lowest low fertility we conclude that pension reforms may have had unintended inter-generational effects. This conclusion is consistent with the sharp drop in total fertility documented by official statistics for the most conservative areas of the country.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 8071.

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Length: 48 pages
Date of creation: Mar 2014
Date of revision:
Handle: RePEc:iza:izadps:dp8071
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