DP9945 Roadblocks on the Road to Grandma's House: Fertility Consequences of Delayed Retirement

Author(s): Erich Battistin, Michele De Nadai, Mario Padula
Publication Date: April 2014
Keyword(s): Fertility, Informal Child Care, Pension Reforms
JEL(s): H42, J08, J13
Programme Areas: Labour Economics, Public Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=9945

We investigate the role of grandparental childcare for fertility decisions of their offspring. Exploiting pension reforms in Italy, we argue that delayed retirement means a negative shock to the supply of informal childcare for the next generation. We show that one additional grandparent available in the early child-bearing years increases by 5% the number of children. Effects are limited to the most familistic close-knits, and are not the mechanical consequence of changes in living arrangements, investment in education or labor supply. Given the Italian lowest low fertility, we conclude that pension reforms may have had unintended inter-generational effects.