Pensions and Fertility: Micro-Economic Evidence

70 Pages Posted: 30 Mar 2020 Last revised: 19 May 2022

See all articles by Alexander Danzer

Alexander Danzer

Catholic University of Eichstaett-Ingolstadt

Lennard Zyska

KU Eichstaett-Ingolstadt - Department of Economics and Business Administration

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Abstract

This study identifies the causal effect of pension generosity on women's fertility behavior. It capitalizes on Brazil's expansion of the pension system to rural workers, whose pension wealth subsequently more than tripled. Event study, difference-in-differences and instrumental variable methods show that the pension reform reduces the propensity of childbearing of women in fertile age by 10% in the short-run. Completed fertility declines by 1.3 children within 20 years after the reform, reducing the contribution base of the Pay-As-You-Go pension system in the long-run. The fertility response is strongest at higher birth parities, among older women and among mothers with sons.

Keywords: old-age security hypothesis, fertility, pension wealth, quasi-experiment, PAYG, Brazil

JEL Classification: J13, I38, H55, D15

Suggested Citation

Danzer, Alexander and Zyska, Lennard, Pensions and Fertility: Micro-Economic Evidence. IZA Discussion Paper No. 13048, Available at SSRN: https://ssrn.com/abstract=3562838

Alexander Danzer (Contact Author)

Catholic University of Eichstaett-Ingolstadt ( email )

Auf der Schanz 49
Ingolstadt, D-85049
Germany

Lennard Zyska

KU Eichstaett-Ingolstadt - Department of Economics and Business Administration ( email )

Auf der Schanz 49
Ingolstadt, D-85049
Germany
+049 (0) 841 / 937 - 21836 (Phone)

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