IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Fertility Choice and Financial Development

Listed author(s):
  • Filoso, Valerio
  • Papagni, Erasmo

We study the consequences of broader access to credit and to capital markets on household's decisions over the number of children. In a life-cycle model of choice with forward and backward caring between parents and children, we analyze the effects of relaxing adults' borrowing constrains and broadening the opportunities for financial investment, and show how the sign of these effects depends on the role of children as a normal or inferior good in parents' preferences. We estimate the quantitative implications of our theoretical model on data from 145 countries over the period 1980--2006. Empirical results indicate that improved access to credit reduces fertility in poor countries and increases fertility in high-income countries. The effect of the development of capital markets on the number of children is negative in low-income countries and positive in the rich. When the analysis includes public pensions the main results remain the same. We also estimate the effect of the real interest rate, which proves significant and negative.

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: https://mpra.ub.uni-muenchen.de/25930/2/MPRA_paper_25930.pdf
File Function: original version
Download Restriction: no

File URL: https://mpra.ub.uni-muenchen.de/56795/1/MPRA_paper_56795.pdf
File Function: revised version
Download Restriction: no

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 25930.

as
in new window

Length:
Date of creation: 15 Oct 2010
Handle: RePEc:pra:mprapa:25930
Contact details of provider: Postal:
Ludwigstraße 33, D-80539 Munich, Germany

Phone: +49-(0)89-2180-2459
Fax: +49-(0)89-2180-992459
Web page: https://mpra.ub.uni-muenchen.de

More information through EDIRC

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. Beck Thorsten & Büyükkarabacak Berrak & Rioja Felix K. & Valev Neven T., 2012. "Who Gets the Credit? And Does It Matter? Household vs. Firm Lending Across Countries," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(1), pages 1-46, March.
  2. De Gregorio, Jose, 1996. "Borrowing constraints, human capital accumulation, and growth," Journal of Monetary Economics, Elsevier, vol. 37(1), pages 49-71, February.
  3. James Feyrer & Bruce Sacerdote & Ariel Dora Stern, 2008. "Will the Stork Return to Europe and Japan? Understanding Fertility within Developed Nations," Journal of Economic Perspectives, American Economic Association, vol. 22(3), pages 3-22, Summer.
  4. Becker, Gary S & Lewis, H Gregg, 1973. "On the Interaction between the Quantity and Quality of Children," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages 279-288, Part II, .
  5. Oded Galor, 2012. "The demographic transition: causes and consequences," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 6(1), pages 1-28, January.
  6. 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.
  7. Michele BOLDRIN & Mariacristina DE NARDI & Larry E. JONES, 2015. "Fertility and Social Security," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 81(3), pages 261-299, September.
  8. Abdul Abiad & Ashoka Mody, 2005. "Financial Reform: What Shakes It? What Shapes It?," American Economic Review, American Economic Association, vol. 95(1), pages 66-88, March.
  9. Luis Angeles, 2010. "Demographic transitions: analyzing the effects of mortality on fertility," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(1), pages 99-120, January.
  10. Ehrlich, Isaac & Lui, Francis T, 1991. "Intergenerational Trade, Longevity, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1029-1059, October.
  11. Burgoon, Brian & Demetriades, Panicos & Underhill, Geoffrey R.D., 2012. "Sources and legitimacy of financial liberalization," European Journal of Political Economy, Elsevier, vol. 28(2), pages 147-161.
  12. Cigno, Alessandro, 1993. "Intergenerational transfers without altruism : Family, market and state," European Journal of Political Economy, Elsevier, vol. 9(4), pages 505-518, November.
  13. Theodore W. Schultz, 1974. "Economics of the Family: Marriage, Children, and Human Capital," NBER Books, National Bureau of Economic Research, Inc, number schu74-1.
  14. Borck, Rainald & Wrohlich, Katharina, 2011. "Preferences for childcare policies: Theory and evidence," European Journal of Political Economy, Elsevier, vol. 27(3), pages 436-454, September.
  15. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, number 9780521845731, December.
  16. Willis, Robert J, 1973. "A New Approach to the Economic Theory of Fertility Behavior," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages 14-64, Part II, .
  17. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
  18. Theodore W. Schultz, 1974. "References and Index to "Economics of the Family: Marriage, Children, and Human Capital"," NBER Chapters,in: Economics of the Family: Marriage, Children, and Human Capital, pages 549-584 National Bureau of Economic Research, Inc.
  19. Carol Scotese Lehr, 2009. "Evidence on the Demographic Transition," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 871-887, November.
  20. Nishimura, Kazuo & Zhang, Junsen, 1992. "Pay-as-you-go public pensions with endogenous fertility," Journal of Public Economics, Elsevier, vol. 48(2), pages 239-258, July.
  21. 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.
  22. Mark Pin & Shahidur Khandker & Signe-Mary Mckernan & M. Latif, 1999. "Credit programs for the poor and reproductive behavior in low-income countries: Are the reported causal relationships the result of heterogeneity bias?," Demography, Springer;Population Association of America (PAA), vol. 36(1), pages 1-21, February.
  23. Neher, Philip A, 1971. "Peasants, Procreation, and Pensions," American Economic Review, American Economic Association, vol. 61(3), pages 380-389, June.
  24. Norman Loayza & Klaus Schmidt-Hebbel & Luis Servén, 2000. "What Drives Private Saving Across the World?," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 165-181, May.
  25. Thorsten Beck & Asli Demirgüç-Kunt & Ross Levine, 2010. "Financial Institutions and Markets across Countries and over Time: The Updated Financial Development and Structure Database," World Bank Economic Review, World Bank Group, vol. 24(1), pages 77-92, January.
  26. Loayza, Norman & Schmidt-Hebbel, Klaus & Serven, Luis, 2000. "What drives private saving around the world?," Policy Research Working Paper Series 2309, The World Bank.
  27. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
  28. Ugo Panizza, 2008. "Domestic And External Public Debt In Developing Countries," UNCTAD Discussion Papers 188, United Nations Conference on Trade and Development.
  29. Leonid Azarnert, 2006. "Child mortality, fertility, and human capital accumulation," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(2), pages 285-297, June.
  30. Fiona Steele & Sajeda Amin & Ruchira Naved, 2001. "Savings/credit group formation and change in contraception," Demography, Springer;Population Association of America (PAA), vol. 38(2), pages 267-282, May.
  31. Isaac Ehrlich & Jinyoung Kim, 2007. "Social Security and Demographic Trends: Theory and Evidence from the International Experience," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(1), pages 55-77, January.
  32. Baltagi, Badi H., 1981. "Simultaneous equations with error components," Journal of Econometrics, Elsevier, vol. 17(2), pages 189-200, November.
  33. Eckstein, Zvi & Wolpin, Kenneth I., 1985. "Endogenous fertility and optimal population size," Journal of Public Economics, Elsevier, vol. 27(1), pages 93-106, June.
  34. Matthias Doepke, 2005. "Child mortality and fertility decline: Does the Barro-Becker model fit the facts?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(2), pages 337-366, 06.
  35. 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;European Society for Population Economics, vol. 5(4), pages 319-341.
  36. Becker, Gary S, 1974. "A Theory of Marriage: Part II," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 11-26, Part II, .
  37. Rajan, Raghuram G. & Zingales, Luigi, 2003. "The great reversals: the politics of financial development in the twentieth century," Journal of Financial Economics, Elsevier, vol. 69(1), pages 5-50, July.
  38. Assaf Razin & Efraim Sadka, 1995. "Population Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262181606.
  39. Gary S. Becker & Robert J. Barro, 1988. "A Reformulation of the Economic Theory of Fertility," The Quarterly Journal of Economics, Oxford University Press, vol. 103(1), pages 1-25.
  40. 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.
  41. Lagerlof, Nils-Petter, 1997. "Endogenous fertility and the old-age security hypothesis: A note," Journal of Public Economics, Elsevier, vol. 64(2), pages 279-286, May.
  42. Berthold U. Wigger, 1999. "Pay-as-you-go financed public pensions in a model of endogenous growth and fertility," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(4), pages 625-640.
  43. Gary S. Becker, 1960. "An Economic Analysis of Fertility," NBER Chapters,in: Demographic and Economic Change in Developed Countries, pages 209-240 National Bureau of Economic Research, Inc.
  44. Thorsten Beck & Asli Demirgüç-Kunt & Ross Levine, 2000. "A New Database on the Structure and Development of the Financial Sector," World Bank Economic Review, World Bank Group, vol. 14(3), pages 597-605, September.
  45. Carol Scotese Lehr, 1999. "Banking on fewer children: Financial intermediation, fertility and economic development," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(4), pages 567-590.
  46. Galasso, Vincenzo & Profeta, Paola, 2002. "The political economy of social security: a survey," European Journal of Political Economy, Elsevier, vol. 18(1), pages 1-29, March.
  47. Schuler, Sidney Ruth & Hashemi, Syed Mesbahuddin & Riley, Ann P., 1997. "The influence of women's changing roles and status in Bangladesh's fertility transition: Evidence from a study of credit programs and contraceptive use," World Development, Elsevier, vol. 25(4), pages 563-575, January.
  48. World Bank, 2010. "World Development Indicators 2010," World Bank Publications, The World Bank, number 4373, June.
Full references (including those not matched with items on IDEAS)

This item is featured on the following reading lists or Wikipedia pages:

  1. Economic Logic blog

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:25930. 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: (Joachim Winter)

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.