What Explains Fertility? Evidence from Italian Pension Reforms
CESifo, Munich, 2009
CESifo Working Paper No. 2646
![](https://cesifo.org/DocImg/cesifo1_wp2646.jpg?c=1689236894)
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.
Social Protection