Pensions and Fertility: Microeconomic Evidence

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. Difference-in-difference, instrumental variable, and event study methods show that the pension reform reduces the propensity of childbearing of women of fertile age by 8 percent 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 long run. The fertility response is strongest at higher birth parities, among older women, and among mothers with sons. (JEL H55, I38, J13, J16, O15)

Fertility in High-Income Countries: Trends, Patterns, Determinants, and Consequences

“…Building on Caldwell (1976Caldwell ( , 2005 and calibrating the model to a set of modern countries, Boldrin et al (2015) show that old-age security and access to private capital markets account for a sizeable part of the fertility differences across countries and over time within their simulation. According to recent evidence in Shen et al (2020) and Danzer and Zyska (2023), similar findings apply to the introduction and expansion of social security within two newly industrialized countries, Brazil and China, both of which experienced fertility declines. Bau (2021) shows that the introduction of social security also has the power to soften traditional family norms on co-residence, which comes, however, at the expense of lower educational investments.…”