DP16358 The Old-Age Security Motive for Fertility: Evidence from the Extension of Social Pensions in Namibia

Author(s): Mathilde Godard, Pauline Rossi
Publication Date: July 2021
Keyword(s): Africa, Difference-in-Differences, Fertility, Old-age pensions, Social Security
JEL(s): D15, H55, I38, J13, O15, O55
Programme Areas: Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16358

The old-age security motive for fertility postulates that people's needs for old-age support raise the demand for children. We exploit the extension of social pensions in Namibia during the nineties to provide a quasi-experimental quantification of this widespread idea. The reform eliminated inequalities in pension coverage and benefits across regions and ethnic groups. Combining differences in pre-reform pensions and differences in exposure across cohorts, we show that pensions substantially reduce fertility, especially in late reproductive life. The results suggest that improving social protection for the elderly could go a long way in fostering fertility decline in Sub-Saharan Africa.